Microsoft's AI Bet Faces Investor Skepticism in 7-Day Slide

Microsoft's stock is on track for its longest losing streak in over a decade, with shares falling for seven consecutive sessions as investor sentiment shifts amid concerns over artificial intelligence spending and broader market dynamics. The decline, which began after the company released better-than-expected earnings in late October, has erased roughly 8.6% of its value over the eight-day stretch, wiping out nearly $350 billion in market capitalization, according to a Yahoo Finance article. This marks the longest selloff since a nine-day drop ending in November 2011, according to a Bloomberg report.

Analysts attribute the selloff to a combination of factors, including a rotation of capital away from "laggard" Big Tech stocks and skepticism about the returns on Microsoft's aggressive AI infrastructure investments. The company spent $34.9 billion on capital expenditures in the most recent quarter, with management signaling further increases in the current fiscal period, the Yahoo Finance article noted. "Even good earnings get dismissed," wrote Mizuho analyst Jordan Klein in a Morningstar piece, highlighting the high expectations investors have for Microsoft's performance. Meanwhile, the broader tech sector has faced a correction, with the Nasdaq 100 and the Bloomberg Magnificent 7 Total Return Index down about 4% this week—on track for their largest one-week drop since April, the Bloomberg report noted.

Despite the stock's underperformance, Microsoft's fundamentals remain strong. Its Azure cloud business grew 40% year-over-year, exceeding expectations, while total revenue reached $77.77 billion in the fiscal first quarter of 2026, according to Yahoo Finance's Q1 report. The company has also expanded its AI infrastructure, including a $9.7 billion deal to secure AI computing capacity from IREN Ltd. over five years, as described in a TS2 article. However, investors appear focused on the long-term payback timeline for these investments. "The tension between record AI capex and near-term returns is the core driver of the pullback," noted one analyst in the TS2 article.

The selloff contrasts with the performance of Apple Inc., which has gained 0.9% recently amid reduced reliance on AI-driven growth strategies, as Bloomberg reported. This divergence underscores a broader market reassessment of AI-centric stocks, which had powered much of the year's gains. Microsoft's challenges are also compounded by regulatory scrutiny and customer concerns, including recent refunds for Microsoft 365 subscribers in Australia following regulatory criticism, reported in the TS2 article.

The company's strategic moves, such as launching a "humanist superintelligence" initiative to explore AI applications in medicine and clean energy, aim to address these concerns while reinforcing long-term ambitions (outlined in the TS2 article). Yet, near-term price action hinges on whether investors will regain confidence in the scalability of Azure and Copilot-driven revenue. With Microsoft's ex-dividend date approaching on November 20, market participants are closely watching for signs of stabilization.