By Simply Wall St
Publication Date: 2026-02-06 11:06:00
Make better investment decisions with Simply Wall St’s easy, visual tools that give you a competitive edge.
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Software stocks recently experienced a sharp sector wide selloff tied to concerns about rapid AI disruption and shifting competitive pressures.
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NasdaqGS:MSFT was caught in the move, with shares seeing a rare double digit slide despite the company reporting robust earnings.
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Investors are focused on slowing Azure growth, very high AI related capital spending, and Microsoft’s growing financial exposure to OpenAI.
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A rare high profile analyst downgrade has added to questions around near term profit margins and competitive risks from new AI players such as Anthropic.
For investors, Microsoft sits at the center of several important trends in software and cloud, with Azure, Office, Windows, and gaming all increasingly tied to AI services. The company’s heavy AI spending and deep partnership with OpenAI have made AI a core part of the NasdaqGS:MSFT investment…
