Microsoft is having a very bad year, and Wall Street wants answers.
Shares of the software giant have fallen more than 24% year-to-date as of late June 2026, trading around $365 with intraday swings between $363 and $379. That puts MSFT on track for its worst annual start since the dot-com era collapsed tech valuations in the early 2000s.
The culprit, at least in investors’ minds, is a spending plan that makes other big-budget endeavors look modest. Microsoft has committed roughly $190 billion in capital expenditures for 2026, almost entirely aimed at AI infrastructure: data centers, GPUs, and the computing backbone needed to power the next generation of AI services. Investors are not disputing the vision. They are disputing the timeline.
The gap between spending and returns
Azure, Microsoft’s cloud division, did post a 31% year-over-year revenue increase in the most recent quarter, driven by AI services adoption. More than 80% of Fortune 500 companies are now using Microsoft’s AI offerings. The problem is that Azure’s impressive growth rate is not, by itself, enough to offset the sheer scale of what Microsoft is spending to keep that growth alive.
