By Eric Volkman
Publication Date: 2026-02-05 17:00:00
Key Points
It’s getting crushed along with many other software stocks.
Investors continue to worry that legacy developers will get left behind in the great artificial intelligence race.
- 10 stocks we like better than Microsoft ›
No matter the how strong their business, software stocks as a group are taking a real clobbering these days. On Thursday this rout continued, and it claimed some of the biggest names in the segment. One was Microsoft (NASDAQ: MSFT), which saw its shares decline by nearly 5% that trading session. The negative sentiment on software titles was exacerbated by an analyst’s downgrade.
A more bearish view
Well before market open that morning, Stifel‘s Brad Reback changed his recommendation on Microsoft stock. He’s now convinced it’s only a hold, where previously he had flagged it as a buy. This was accompanied by a significant price target reduction to $392 per share from $540.
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