Microsoft Corporation (NASDAQ: MSFT) ended Wednesday, December 10, 2025, under pressure, with the stock sliding into the close and ticking slightly lower in after‑hours trading as fresh regulatory heat on AI and questions about monetizing massive AI investments weighed on sentiment.
At the same time, Wall Street remains broadly bullish on Microsoft’s long‑term prospects, even as near‑term technicals flash caution and algorithmic models send mixed signals. Here’s a concise look at where MSFT stands after the bell — and what to watch before the market opens on Thursday, December 11, 2025.
How Microsoft Stock Traded on December 10, 2025
- Regular session:
Public after‑hours data shows Microsoft closed Wednesday at $478.56, down from $492.02 on Tuesday, a decline of roughly 2.7% on the day. [1] - After-hours action:
As of 5:00 p.m. ET, MSFT was trading at $478.20 in the after‑hours session, off just $0.36 (-0.08%) from the regular close, with an after‑hours range between $477.50 and $478.66. [2] - Size and valuation:
With Wednesday’s close, Microsoft’s market capitalization is around $3.6 trillion, and the stock trades on a trailing P/E of roughly 35, firmly in mega‑cap, premium‑valuation territory. [3]
Intraday, MSFT moved in a broad range, with external data indicating a low near $475 and a high just above $493, before sellers took control into the close. [4]
Notably, this drop comes even as major U.S. indexes rallied following the Federal Reserve’s widely expected quarter‑point rate cut, which pushed the Dow and S&P 500 sharply higher and left the S&P just shy of a new closing record. [5] Microsoft significantly underperformed that backdrop.
Why Microsoft Stock Fell: AI Chatbots Under the Microscope
State attorneys general warn over “delusional outputs”
The clearest same‑day catalyst came from a new wave of regulatory scrutiny aimed directly at generative AI — and by extension, at Microsoft’s AI strategy.
- A bipartisan coalition of U.S. state attorneys general sent a letter to 13 major tech companies — including Microsoft, Google, Meta and Apple — warning that their AI chatbots can produce “delusional outputs” that may encourage users’ unhealthy beliefs and potentially violate state laws. [6]
- The letter cites media reports of vulnerable users, including a teenager discussing suicidal thoughts with an AI chatbot, and calls for independent audits of AI systems plus greater state and federal oversight. [7]
- Microsoft and Google declined to comment; Meta and Apple did not immediately respond to Reuters. [8]
Investors don’t need the exact legal wording to grasp the implication: this is a coordinated, bipartisan warning that puts Microsoft’s AI products and partnerships under a brighter regulatory spotlight. It raises the risk of:
- Tighter compliance requirements and product restrictions
- Potential civil litigation if harmful interactions are linked to chatbots
- Slower, more cautious rollout of high‑profile AI assistants like Copilot
That risk‑off shift showed up immediately in markets. Investing.com highlighted the letter as it noted Microsoft shares down about 2.7% intraday, alongside modest moves in other mega‑cap tech names. [9]
Stock‑focused coverage from The Motley Fool explicitly connected Wednesday’s MSFT sell‑off to this “finger‑wagging” from state attorneys general, framing the move as a reaction to regulatory scrutiny rather than any deterioration in Microsoft’s core business. [10]
Big AI Spending Meets Tough Questions on Monetization
The regulatory overhang landed just as investors were digesting enormous new AI infrastructure commitments from Microsoft.
$23 billion in new AI data center investments
On Tuesday evening and into Wednesday, Microsoft and news outlets detailed a $23 billion wave of fresh AI investments, with a heavy focus on India and Canada: [11]
- $17.5 billion for India over four years starting in 2026, aimed at building what could become the country’s largest cloud‑computing presence and expanding hyperscale data centers in Hyderabad and other regions. [12]
- More than C$7.5 billion (~$5.4 billion) in Canada over the next two years, as part of a broader C$19 billion AI and cloud investment plan running through 2027. The company is adding cloud capacity, expanding its Azure Local regions, and deepening partnerships with Canadian AI players like Cohere. [13]
Reuters noted that Microsoft’s spending is part of a broader arms race in which U.S. cloud providers are on pace to plow over $400 billion into AI‑related data centers this year alone, fueling both optimism about AI growth and fears of an emerging AI capital‑expenditure bubble. [14]
A “plunge” that reflects AI demand friction
At the same time, a widely circulated analysis on TradingView via Invezz described Wednesday’s move as a plunge driven by doubts about whether Microsoft’s AI first‑mover advantage is eroding: [15]
Key points from that piece:
- Microsoft has poured roughly $80 billion into AI infrastructure through 2025.
- Internal units reportedly missed aggressive sales targets for Copilot and the Foundry enterprise AI platform by as much as 80%, prompting management to reset growth expectations. [16]
- Flagship product Microsoft 365 Copilot, priced around $30 per user per month, is estimated to have only ~2% adoption among roughly 440 million Office users, as enterprise buyers balk at multi‑million‑dollar annual AI add‑on bills with still‑murky ROI. [17]
- Competitors like Anthropic, open‑source models from DeepSeek and Meta, and other third‑party providers are chipping away at Microsoft’s once‑dominant AI positioning, while cheaper alternatives compress pricing power. [18]
In other words, markets are being asked to digest:
Huge and rising AI capital spending
plus
slower‑than‑hoped monetization and intensifying competition
That tension helps explain why investors were quick to sell on any whiff of regulatory or demand risk.
Office Price Hikes, Sticky Customers, and Analyst Targets
Layered onto the AI story is a notable pricing move in Microsoft’s core productivity business.
A new analysis from MarketBeat reports that Microsoft plans to raise commercial Office subscription prices by up to 33% starting July 1, 2026, even as AI adoption lags initial expectations and some enterprise customers demand clearer ROI on Copilot. [19]
However, the same article underscores several important offsets: [20]
- Microsoft 365 has become “non‑negotiable” infrastructure for most organizations, making large‑scale switching to alternatives like Google Workspace unlikely.
- Rather than relying solely on selling Copilot as an optional add‑on, Microsoft is increasingly embedding AI into the baseline subscription, using price resets to recapture value.
- Wall Street remains constructive:
- Jefferies reiterated a Buy rating with a $675 price target.
- DA Davidson reiterated Buy with a $650 target.
- MarketBeat’s consensus target sits near $632, implying roughly 30% upside from current levels.
MarketBeat characterizes the recent pullback — roughly 14% below the 52‑week high around $555 — as making MSFT “attractive at any price under $500,” while also noting that valuations are no longer as stretched as they were in late October. [21]
Fundamental Outlook: Mostly Bullish, With Some Valuation Warnings
24/7 Wall St: strong upside through 2030
A detailed December 8 forecast from 24/7 Wall St. leans decisively bullish: [22]
- Consensus 12‑month price target: about $625, roughly 29% above today’s price.
- Their own model sees MSFT at approximately $563 by the end of 2025, implying mid‑teens upside from current levels.
- They expect revenue growth slightly above 8%, with Azure maintaining 20%‑plus growth, and project EPS of about $15.67 for the year.
- Long‑term projections call for a potential stock price near $897 by 2030, more than 85% higher than current levels, assuming continued double‑digit earnings growth.
24/7 Wall St. also notes that despite Microsoft’s massive run — turning its split‑adjusted IPO price of $0.14 into roughly $480 today — the company continues to grow revenues and net income at a pace that has consistently outpaced the broader market. [23]
Simply Wall St, Zacks, and others on valuation
A fresh note from Simply Wall St looks at Microsoft’s valuation after its new India and Canada AI commitments and concludes that, given double‑digit earnings growth, investors may actually be paying a discount relative to an estimated “fair” P/E multiple of about 52.8x, even though the current multiple is already high by market standards. [24]
The article emphasizes:
- Microsoft’s “flawless” balance sheet, strong track record, and ongoing dividend.
- The need to balance AI opportunity against execution and valuation risk — suggesting the current price still leaves room for upside but isn’t risk‑free. [25]
On the earnings side, Zacks estimates Microsoft will earn roughly $3.86 per share in the quarter ending December 2025, with full‑year and fiscal 2026 EPS forecasts inching higher over the past month, even as investors debate whether AI infrastructure spending can maintain its torrid pace. [26]
Other commentators are more cautious. A recent Forbes analysis (paywalled) cites strong AI and cloud positioning but suggests Microsoft’s fair value might sit closer to $350 per share, implying downside from current levels if growth or margins disappoint. [27]
Technical Picture and Quant Models: Support Tested, Signals Mixed
Key levels around $479
A technical deep‑dive on Seeking Alpha highlights several levels traders will be watching closely: [28]
- The stock has been holding near its 200‑day EMA around $479, where buyers have repeatedly stepped in.
- Overhead, a resistance band between $499 and $507 is seen as the ceiling of the current downtrend.
- A clean break above $507 would be a bullish inflection, likely opening a path toward the prior high near $553.
- A daily close below support near $479 would raise the risk of a deeper pullback back into the mid‑$460s.
Wednesday’s close at $478.56 means MSFT is effectively sitting on that 200‑day EMA support, making tomorrow’s open and the next few sessions technically important. [29]
A separate Seeking Alpha piece, “Microsoft’s Underperforming Assets (Upgrade),” upgrades the stock to Buy after its recent double‑digit pullback, emphasizing that: [30]
- The underperforming More Personal Computing segment is now a smaller contributor, while search & news advertising remain bright spots.
- Gaming is volatile but strategically shifting toward higher‑margin, platform‑agnostic experiences.
- Despite record AI‑driven capex, Microsoft continues to generate strong free cash flow, supporting its premium valuation.
CoinCodex: short‑term bounce, long‑term caution
Algorithmic forecasts from CoinCodex paint a more conflicted picture: [31]
- Short term: Their model projects Microsoft at around $492.00 on December 11, a 2.84% gain versus the current price, before drifting lower over the following days.
- Technical sentiment: As of late evening on December 10, their dashboard shows 73% of tracked indicators flashing “bearish” (19 bearish vs 7 bullish), indicating pressure across most daily moving averages.
- One‑year and long term:
- 1‑year forecast: around $353.88, implying ~28% downside from current levels.
- 2030 forecast cluster ranges widely but centers only modestly above today’s price, highlighting how sensitive long‑term projections are to growth and valuation assumptions.
CoinCodex’s models are purely quantitative and should be treated as one data point rather than a consensus view, but they underscore how volatile expectations around AI capex and earnings can be.
Upcoming Catalysts: What to Watch Before (and Just After) the December 11 Open
Here are the main things MSFT watchers should keep an eye on going into Thursday’s session:
1. Overnight reaction to the AI chatbot letter
The attorneys general letter only hit the wires Wednesday, and markets are still digesting it. Overnight and pre‑market commentary could focus on:
- Whether Microsoft or its peers issue any statements committing to new safeguards or audits.
- Follow‑up commentary from regulators, lawmakers, or advocacy groups that could hint at future rules or enforcement actions. [32]
Any hint of concrete regulatory proposals — or the opposite, signs that this is mainly political signaling — could sway sentiment at the open.
2. Fed fallout and broader tech/AI sentiment
The Fed’s quarter‑point rate cut and Powell’s relatively dovish tone helped push major U.S. indexes higher on Wednesday. [33]
For Microsoft, the key questions tomorrow will be:
- Do bond yields continue to drift lower, supporting growth stock valuations?
- Do investors treat recent AI‑stock volatility as a buying opportunity or a sign to take profits, as some strategists and commentators have warned about a potential AI bubble? [34]
Performance of peers like Nvidia, Alphabet, Meta, Amazon and Apple will offer an instant sentiment check on the whole AI trade.
3. Barclays Global Technology Conference (during Thursday’s session)
Microsoft’s investor relations site lists an important appearance tomorrow:
- Event: Barclays Global Technology Conference
- Speaker: Judson Althoff, CEO, Microsoft Commercial
- Time:December 11, 2025, at 8:05 a.m. PT (11:05 a.m. ET) [35]
Although this happens after the U.S. market opens, investors will be listening for:
- Updated commentary on Azure AI demand, Copilot adoption, and enterprise AI budgets.
- Management’s tone on AI infrastructure returns after the India and Canada announcements.
- Any response, even indirect, to the chatbot regulatory concerns.
Sharp changes in tone (either more cautious or more confident) can translate into intraday volatility for MSFT.
4. Product & developer events
Microsoft is also running AI Dev Days on December 10–11, a virtual event consolidating recent Microsoft Ignite and GitHub Universe AI announcements for developers. [36]
While this is more of a product/ecosystem event than a stock catalyst, any major surprises around:
- New Copilot capabilities
- AI security posture tools
- Expanded model support on Azure
could feed into the narrative around Microsoft’s ability to monetize AI in the real world.
What It All Means for MSFT Right Now
Putting the pieces together:
- Near term (days to weeks):
- MSFT is sitting on a critical technical support zone around $479, with most short‑term indicators skewing bearish. [37]
- Regulatory risk around AI chatbots has become more concrete, and any additional headlines could amplify volatility. [38]
- At the same time, Fed easing and strong overall tech earnings support the broader backdrop for mega‑cap growth.
- Medium to long term (12+ months):
- Most fundamental analysts still see double‑digit earnings growth and substantial upside from current levels, with typical price targets clustered in the $560–$650 range and some forecasts stretching toward $900+ by 2030. [39]
- Microsoft’s balance sheet, scale, and entrenched productivity suite give it unusual flexibility to absorb AI capex and to reprice subscriptions as needed. [40]
- The biggest open question isn’t whether Microsoft will be a major AI player — it already is — but how profitable that leadership will be after regulatory, competitive and infrastructure costs are factored in.
Nothing in this article is personal investment advice, but as you watch the tape into the December 11 open, keep your eye on:
- Whether MSFT holds the $470s support zone,
- How other AI heavyweights trade in sympathy, and
- What Microsoft’s leadership says tomorrow about AI demand, regulation, and returns on its $23 billion – and counting – AI bet.
References
1. public.com, 2. public.com, 3. stockanalysis.com, 4. robinhood.com, 5. www.investopedia.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.investing.com, 10. www.fool.com, 11. www.reuters.com, 12. www.reuters.com, 13. blogs.microsoft.com, 14. www.reuters.com, 15. www.tradingview.com, 16. www.tradingview.com, 17. www.tradingview.com, 18. www.tradingview.com, 19. www.marketbeat.com, 20. www.marketbeat.com, 21. www.marketbeat.com, 22. 247wallst.com, 23. 247wallst.com, 24. simplywall.st, 25. simplywall.st, 26. www.zacks.com, 27. www.forbes.com, 28. seekingalpha.com, 29. public.com, 30. seekingalpha.com, 31. coincodex.com, 32. www.reuters.com, 33. www.investopedia.com, 34. www.theatlantic.com, 35. www.microsoft.com, 36. developer.microsoft.com, 37. seekingalpha.com, 38. www.reuters.com, 39. 247wallst.com, 40. blogs.microsoft.com
