NEW YORK, March 24, 2026, 11:48 EDT
Microsoft lost about 2.5% on Tuesday, slipping to $373.61 as fresh chatter picked up around the company’s anticipated 2026 selloff. Morningstar and Seeking Alpha called the dip a buying window, but a piece tied to TipRanks struck a more cautious tone. Shares now sit around 21% below where they finished on Jan. 2.
This split is grabbing attention, given Microsoft’s pivotal role in Wall Street’s AI fever and the ongoing surge in data centre investments by the cloud giants. Shares pulled back Tuesday, with U.S. equities sliding amid heightened Middle East tensions, a stubbornly strong oil market, and cooling expectations for rate cuts—conditions that tend to weigh on pricey tech stocks first.
Microsoft’s results for the January quarter split opinions. Revenue climbed 17% to $81.3 billion, net income on a GAAP basis surged 60% to $38.5 billion, yet capital expenditures ballooned to $37.5 billion. Microsoft Cloud’s gross margin slipped to 67%, squeezing some profitability out of those gains. CFO Amy Hood said demand from customers continued to outpace what Microsoft could deliver.
Dan Romanoff at Morningstar isn’t buying the drop—he called the selloff overdone Monday. Romanoff maintains Microsoft’s wide moat is still solid, and points out shares now sit 33% under Morningstar’s $600 fair value target. Azure, Office 365 upselling, and the OpenAI alliance, he said, keep fueling Microsoft’s long-term growth story.
Yiannis Zourmpanos, a contributor to Seeking Alpha, echoed that argument. He highlighted Microsoft’s $625 billion in commercial remaining performance obligations—essentially contracted revenue still to be booked—with roughly a quarter of that set to hit the books over the next year. Azure’s growth checked in at 38% after stripping out currency effects, and Microsoft 365 Copilot had signed up 15 million paying seats.
Microsoft’s messaging stayed positive. Chief Executive Satya Nadella described the company as being at the “beginning phases of AI diffusion” and noted that its AI business now outpaces some of its more established segments. Microsoft Cloud revenue topped $50 billion for the quarter, CFO Amy Hood said. Microsoft
The bearish angle lands hard. Investor Vladimir Dimitrov, quoted in a TipRanks piece, argued Microsoft’s prospects aren’t as “straightforward” as many retail traders assume. He pointed to a 3% decline in More Personal Computing revenue, weaker growth in Productivity and Business Processes, and added that rising infrastructure costs could squeeze margins. Dimitrov doesn’t see the stock outperforming the market in 2026.
Competition isn’t letting up. Reuters said last week that Amazon, Alphabet, Meta, Microsoft, and Oracle could take on more debt this year to bankroll AI infrastructure. This comes after the group already floated $121 billion in U.S. corporate bonds in 2025. The spending spree is only intensifying the fight between Azure, AWS, and Google Cloud, just as investors are pushing for more concrete returns from the AI buildout.
The once straightforward Microsoft-OpenAI alliance has grown tangled. On March 18, Reuters said Microsoft was weighing possible legal action over Amazon’s $50 billion cloud agreement with OpenAI, arguing it might conflict with Azure’s exclusive rights to certain OpenAI offerings.
Basic hurdles are also in play. “You have to win over the local community,” Microsoft President Brad Smith said Tuesday, underscoring how building U.S. data centres now hangs on permits, electricity, and local support—not just software appetite. Reuters
If Azure is still bumping up against capacity limits and oil prices stay elevated, keeping rates and valuations under stress, Microsoft could find it tough to reclaim the rich multiple it enjoyed heading into 2026. On the other hand, stronger Copilot uptake and more backlog converting to actual bookings would likely close the distance between buyers looking for a deal and doubters holding out.
