Under double pressure from AI, Microsoft may have its worst quarterly performance since 2008.

Mars Finance news, March 27 - According to reports, Microsoft is at the intersection of two concerning trends sweeping the tech industry, which could result in the stock posting its worst quarterly performance since the global financial crisis two decades ago. First, while Wall Street increasingly questions when investments in artificial intelligence infrastructure will yield more significant returns in revenue growth, the software giant is ramping up capital expenditures. Secondly, investors are selling off software stocks due to concerns that AI startups like Anthropic and OpenAI are developing agents that could replace products from companies like Microsoft. It is reported that Microsoft’s stock price fell 24% in the first quarter, which could mark the largest drop since a 27% decline in the fourth quarter of 2008. So far this year, among the “Seven Giants of Tech Stocks,” Microsoft has shown the weakest performance, while an index tracking this group has fallen 13% during the same period. This wave of selling has made the stock look relatively cheap, with a price-to-earnings ratio of less than 20 times expected earnings for the next 12 months, the lowest since June 2016. Microsoft’s valuation multiple is slightly above that of the S&P 500 index, and it has recently even traded at a discount relative to this broad stock benchmark for the first time since 2015. (Wide-Angle Observation)