I Was Wrong About Microsoft Stock. The Great Rotation Changed Everything.

I Was Wrong About Microsoft Stock. The Great Rotation Changed Everything.

By Micah Zimmerman, The Motley Fool
Publication Date: 2026-04-01 15:35:00

I didn’t see this Microsoft (NASDAQ: MSFT) stock sell-off coming, at least not the nearly 30% share price drop in the last six months.

Like many investors, I spent the better part of 2024 and early 2025 believing Microsoft stock was essentially untouchable. I didn’t buy any while it ran up more than 80% during that time, and thought I had missed the bus. The company took a stake in OpenAI, was embedding Copilot across its entire product suite, and was generating cash flows that most businesses only dream about. The Azure cloud business was growing. Then 2026 hit, and the stock plunged in the first quarter, marking its steepest drop since the 2008 financial crisis.

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Image source: Getty Images.

I, along with the rest of the market, underestimated…