Trending Now - Microsoft Braces for Worst Quarterly Loss Since 2008 Amid AI Challenges
WHO:
Jonathan Cofsky, portfolio manager at Janus Henderson Investors
Microsoft Corp.
Jonathan Cofsky, portfolio manager at Janus Henderson Investors
WHAT:
Microsoft’s stock is down 25% in the first quarter of 2026, making it the weakest performer among the Magnificent Seven tech giants.
The stock is trading at less than 20 times earnings over the next 12 months, the lowest since June 2016.
Microsoft’s capital expenditures, including leases, are projected to reach $146 billion in fiscal 2026, which closes at the end of June 2026.
Microsoft is on track for its worst quarterly performance since 2008.
The company's stock is down 25% in the first quarter of 2026.
Microsoft’s stock is experiencing its biggest loss since a 27% drop in the fourth quarter of 2008.
Microsoft’s capital expenditures are projected to reach $146 billion in fiscal 2026, up 66% from $88 billion in fiscal 2025.
Projections indicate capital expenditures will swell to $170 billion in fiscal 2027 and $191 billion in fiscal 2028.
Microsoft’s Azure cloud-computing division posted a slight deceleration in growth from the prior quarter.
Microsoft’s Copilot AI offering has received limited traction from users.
WHERE:
Not specified in the articles.
WHEN:
The fiscal year 2026 closes at the end of June 2026.
The stock is on track for a fourth straight session in the red as of March 27th, 2026.
WHY:
There is concern that customers may choose to go directly to AI vendors instead of paying Microsoft, which could disrupt its core business.
Concerns exist that customers may choose to go directly to AI vendors instead of paying Microsoft, potentially disrupting its core business.
Investors are selling software stocks due to fears that AI startups like Anthropic and OpenAI are creating products that could replace Microsoft’s offerings.
HOW:
Microsoft is shaking up its AI operations to improve the Copilot service due to limited traction from users.
Microsoft is increasing capital expenditures in response to competition in the AI sector.
The company is shaking up its AI operations to improve the Copilot service.
(UPDATED March 27, 2026 23:07 UTC)
Microsoft's stock has dropped 25% in the first quarter of 2026, making it the weakest performer among the Magnificent Seven tech giants, and it's now trading at less than 20 times earnings over the next 12 months, the lowest level since June 2016. Concerns are growing that customers might opt to go directly to AI vendors instead of relying on Microsoft, potentially disrupting its core business, prompting the company to shake up its AI operations to enhance the Copilot service due to limited user traction. Meanwhile, Microsoft's capital expenditures, including leases, are projected to reach $146 billion in fiscal 2026, which ends in June.
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(UPDATED March 27, 2026 19:21 UTC)
Microsoft is facing its worst quarterly performance since 2008, with its stock down 25% in the first quarter of 2026, marking the biggest loss since a 27% drop in late 2008. Concerns are growing that customers may turn to AI vendors instead of Microsoft, prompting the company to increase capital expenditures to $146 billion for fiscal 2026, a 66% rise from the previous year, as it works to revamp its AI operations. Investors are reacting to fears that emerging AI startups like Anthropic and OpenAI could potentially overshadow Microsoft's offerings, leading to a fourth consecutive session of declines in its stock.