Microsoft: Stock to Avoid or Once-in-a-Decade Buying Opportunity?

Since peaking last fall, Microsoft (NASDAQ: MSFT) shares are down more than 25%. The sell-off accelerated in 2026, as fears that generative artificial intelligence (AI) software would render Microsoft’s expensive enterprise software suite obsolete led analysts to rerate how much Microsoft’s current earnings are actually worth. On top of that, Microsoft’s second-quarter earnings report in January showed accelerating spending on AI data centers without a corresponding acceleration in revenue from its Azure cloud computing platform.

There are certainly some well-placed concerns about Microsoft, which increase the risks for investors buying the stock today. The question investors need to ask is whether the current stock price accurately reflects the investment risk or if the market sell-off is overblown at this point and presents an incredible buying opportunity.

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