By Patrick Sanders
Publication Date: 2026-04-20 14:15:00
There’s no doubt that Microsoft (MSFT 0.44%) has been a major disappointment for investors this year. The stock, which was at an all-time high late last year, has fallen 24% from that lofty perch. Now in the red by more than 15% in 2026, Microsoft is on target to have its worst year since 2022.
The major concern for Microsoft is its aggressive capital spending to build out its artificial intelligence infrastructure. The company spent $37.5 billion on capex in the second quarter of fiscal 2026, with much of that funding directed to semiconductor chips, including graphics processing units (GPUs) and central processing units (CPUs). Investors are concerned that companies such as Microsoft are spending billions on chips that have a short lifespan, and that they’re sacrificing free cash flow today without a guarantee that they’ll be able to recoup their investments down the road.
However, analysts such as Benchmark’s Yi Fu Lee have a different take and are projecting big things for…
