A securities class action lawsuit has been filed against Microsoft Corporation (NASDAQ:MSFT) and certain senior executives for securities fraud, following a significant stock drop. The lawsuit, pending in the U.S. District Court for the Western District of Washington, alleges that Microsoft misled investors regarding its Azure cloud computing platform and AI chatbot Copilot. According to the complaint, Microsoft touted Copilot’s best-in-class capabilities and surging Azure-related revenue, but in truth, Copilot suffered from severe functionality issues that caused user adoption to decline and put Azure revenue at risk. On January 28, 2026, Microsoft announced disappointing 2Q 2026 financial results and that Azure growth had slowed suddenly, also revealing for the first time that the number of Microsoft 365 Copilot premium customers totaled only 15 million, materially below analyst estimates. This news caused the price of Microsoft common stock to decline $48.13 per share, or 10%, from $481.63 per share on January 28, 2026, to $433.50 per share on January 29, 2026. Additionally, on February 3, 2026, The Wall Street Journal reported that severe challenges and functionality issues had plagued Copilot, causing the application to lose market share. Investors have until August 11, 2026 to ask the Court to be appointed to lead the case.