SEATTLE - Investors wiped US$35 billion (S$47 billion) off Microsoft Corp's market value on Tuesday without any clear-cut, single explanation.
The world's largest software company, whose shares had climbed about 30 per cent over the past 12 months to near 15-year highs, instead worried investors with a series of troubling signals in its earnings report and conference call on Monday.
"The results weren't that bad," said Scott Kessler, an analyst at Standard & Poor's Capital IQ. "What really struck people was that it wasn't just one thing and it wasn't just a handful of things that had obvious or easy fixes."
The panoply of Microsoft's problems included an unexpectedly soggy PC market after a buying rush sparked by the end of Windows XP, an ongoing dip in companies' spending on Office software, problems in Japan and China and a strong US dollar eating away at the value of its huge overseas revenues.
Investors were aware of most of those issues before Monday, but the combination of concerns pushed Microsoft's stock down 9.25 per cent to US$42.66, its biggest one day fall since Chief Executive Satya Nadella took over last February.
Until Tuesday, Nadella had enjoyed fanatical support from investors, who lapped up his plan to redesign Microsoft as a leader in cloud and mobile computing.
There are now signs that investors are more sceptical of how quickly Nadella can drag the PC-based titan into the mobile world. "They made a splash with Office for iPad, but it remains to be seen to what extent they are really going to be able to pull through substantial percentages of their legacy applications business to the cloud," said Kessler.
Some investors feel Microsoft is not helping itself in how it explains the financial effects of its move into the cloud, for example shifting Office customers from installed versions to the cloud-powered online version called Office 365.
Microsoft discloses revenue in broad business groups, but does not give out concrete user numbers or revenue figures for some of the cloud businesses investors want to know the most about.
"They'd probably serve themselves better if they were able to tease out the detail and demonstrate how strong that transition to the cloud is," said Kevin Walkush, an analyst at Jensen Investment Management. "Right now people are just guessing, and when you leave it to people to guess, they are going to project the worst. It's a frustration for me as an investor."