By Justin Pope
Publication Date: 2026-02-21 17:23:00
Stock prices tend to fluctuate over time, but Microsoft (MSFT 0.31%) is working through a doozy of a slump, at least by the tech giant’s standards. Shares of Microsoft have dropped more than 25% below their high, the stock’s second-worst drawdown in the past 10 years.
A proven, world-class tech giant such as Microsoft doesn’t go down easily. The decline signals trouble; Wall Street is sounding an alarm. So, what exactly is going on?
Several factors are simultaneously impacting the stock. Here is what they are, what they mean, and whether Microsoft stock is likely to trade higher or lower a year from now.
Image source: Getty Images.
Why is Microsoft down? Several reasons, actually
For starters, Microsoft is somewhat between a rock and a hard place with artificial intelligence (AI). It has invested and partnered closely with OpenAI, the developer of ChatGPT. Microsoft has come to rely on OpenAI, which currently accounts for $281 billion of Azure’s $625 billion cloud computing…
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