Microsoft Stock Hits New Lows Amid AI Selloff, Seen as Long-Term Opportunity

Price Action

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Summary · why it matters

Microsoft shares have fallen 22% year-to-date, reaching a new low of $349.20 last week, driven by a broader selloff in AI and mega-cap tech stocks. Despite the decline, the underlying business remains strong, with Microsoft Cloud revenue up 29% year-over-year to $54.5 billion in the third quarter of fiscal 2026 and its AI business surpassing $37 billion in annual recurring revenue, a 123% increase. The company has guided for roughly $190 billion in capital expenditures in fiscal 2026 to build AI infrastructure, which Goldman Sachs believes may strengthen its long-term competitive position. Microsoft now trades at 22 times forward earnings, well below its five-year average of 30 times, and analysts maintain a consensus Strong Buy rating with an average price target implying a 47% rebound.