Microsoft Faces 30% Share Price Drop Amid AI Spending Concerns
Microsoft Corporation (NASDAQ: MSFT) has experienced a nearly 30% decline in share price over the past six months, exacerbated by significant spending in artificial intelligence (AI). The company projected $146 billion in AI infrastructure expenditures for fiscal 2026, while quarterly capital costs surged to $29.9 billion, nearly doubling year-over-year. Additionally, losses related to its investment in OpenAI reached $3.1 billion in one quarter, up from $523 million the previous year.
Despite beating earnings estimates, investor sentiment shifted drastically following the drop, as concerns arose over the sustainability of Microsoft’s AI investments amid declining margins. The market’s initial expectations of seamless, high-margin growth have been challenged, leading to a reevaluation of Microsoft’s long-term potential. Currently, investors are shifting focus from mega-cap tech stocks like Microsoft toward asset-heavy sectors, highlighting the ongoing “Great Rotation” in capital allocation.
