Microsoft's investment in AI encounters doubts from investors amid a week-long decline

Microsoft shares are experiencing their longest downward streak in more than ten years, dropping for seven straight days as investor attitudes shift due to worries about artificial intelligence spending and overall market trends. The slide, which started after the company posted stronger-than-expected quarterly results in late October, has led to an 8.6% decrease in value over eight days, erasing close to $350 billion in market cap, according to a

. This represents the lengthiest losing run since a nine-day decline that ended in November 2011, as reported by .

Experts point to several reasons for the selloff, including investors moving funds out of underperforming Big Tech names and doubts about the payoff from Microsoft’s heavy investments in AI infrastructure. The company allocated $34.9 billion to capital expenditures last quarter, with executives indicating that spending will rise further this fiscal year, according to Yahoo Finance. “Even strong earnings are being overlooked,” wrote Mizuho analyst Jordan Klein in a

, emphasizing the lofty expectations that investors have for Microsoft. At the same time, the tech sector as a whole has seen a pullback, with the Nasdaq 100 and Bloomberg Magnificent 7 Total Return Index both falling about 4% this week—potentially their steepest weekly drop since April, Bloomberg noted.

Despite recent share weakness, Microsoft’s core business remains robust. Azure, its cloud platform, expanded by 40% year-over-year, surpassing forecasts, and total revenue hit $77.77 billion for the first quarter of fiscal 2026, according to

. The company has also grown its AI infrastructure, including a $9.7 billion agreement to obtain AI computing resources from IREN Ltd. over five years, as detailed in . Still, investors are mainly concerned with how long it will take for these investments to pay off. “The main factor behind the pullback is the tension between record AI capital spending and short-term returns,” one analyst stated in the TS2 article.

The recent decline stands in contrast to Apple Inc., which has risen 0.9% lately as it relies less on AI-driven growth, Bloomberg reported. This difference highlights a wider market reevaluation of AI-focused stocks, which have fueled much of this year’s gains. Microsoft also faces additional challenges from regulatory investigations and customer issues, such as recent reimbursements to

365 users in Australia after regulatory complaints, as covered in the TS2 article.

The company’s strategic initiatives, like launching a “humanist superintelligence” project to explore AI’s use in healthcare and renewable energy, are intended to address these challenges while supporting its long-term vision (as described in the TS2 article). However, short-term stock performance will depend on whether investors regain faith in Azure and Copilot’s ability to drive growth. With Microsoft’s ex-dividend date coming up on November 20, the market is watching closely for signs of a rebound.