Microsoft Emerges as Biggest AI Stock Laggard Amid Market Selloff

Microsoft is on track for its worst monthly stock performance since 2000 as investors grow increasingly concerned about capital spending on artificial intelligence (AI) and weakness in the software sector.

Microsoft shares have fallen sharply amid investor concerns over AI spending and slowing software-sector momentum. (Photo: Microsoft Facebook)

The company has been pressured by concerns over heavy capital expenditures, while fellow cloud-computing giant Oracle has faced similar investor skepticism, Business Insider reported.

Among the so-called "Magnificent Seven" technology stocks, Alphabet has strengthened its position through its AI initiatives, while Nvidia continues to dominate the AI chip market.

Apple has struggled with perceptions that it trails competitors in AI development and has relied on partnerships to strengthen its offerings. Meta Platforms has also faced scrutiny because of its heavy dependence on AI-related investments.

Microsoft's recent decline has surprised many investors given its diversified business, dominant cloud platform, and AI assistant, Copilot.

The company's stock is on pace to fall 18 percent in June, marking its steepest monthly decline since the dot-com era in 2000.

Shares are down 24 percent year-to-date, the weakest performance among the Magnificent Seven, erasing approximately $857 billion in market value. The stock is also trading near its lowest level since 2023.