Melius analyst: Microsoft’s Copilot reorganization is a ‘red flag’

Microsoft (NASDAQ:MSFT | MSFT Price Prediction) is down more than 20% year-to-date, making it the worst-performing stock in the Mag-7 by a wide margin. And according to Ben Wright of Melius Research, who recently cut his price target on the stock, the core problem has a name: Copilot.

Wright’s red flag isn’t just about weak adoption numbers. It’s about what Microsoft did in response to them. When a company quietly reshuffles the executive running its most important growth initiative and moves him to work on models instead, that’s not a routine org chart update.

“They reordered the division for Copilot, and now they have the guy that was running it working on models. That’s a red flag,” Wright said, referring to Mustafa Suleyman, who had been leading the Copilot effort. His reasoning: “you rarely reorganize anything into strength.”

The adoption numbers back up his skepticism. In February, Microsoft…