Microsoft stock plunges: is MSFT losing its AI first-mover advantage?

Microsoft stock MSFT dropped sharply on Wednesday amid investor concerns about whether the company’s commanding position in enterprise AI is genuinely unassailable.

While the company has poured $80 billion into AI infrastructure through 2025, the sell-off suggests markets are beginning to question whether massive capex translates into a durable competitive advantage.

The development comes amid a highly competitive race in the artificial intelligence space, with Microsoft’s rivals innovating at a rapid pace.

Microsoft stock: Fresh signs of demand friction

The catalyst was stark as the internal Microsoft units missed aggressive Copilot and Foundry sales targets by as much as 80%.

The development prompted the management to dial back growth expectations.

Foundry, the company’s enterprise AI agent platform, initially targeted 100% revenue growth but was reset to 50% after sales teams stumbled to close deals.

Microsoft’s denial barely dampened the sell-off. Investors recognized the…