Microsoft shares are on track for their steepest monthly decline since the dot-com era, with concerns over the company's aggressive artificial intelligence (AI) spending and long-term growth prospects wiping out more than $570 billion in market value this month, according to Bloomberg.The stock has fallen about 17% in June, putting it on course for its worst monthly performance since December 2000. The decline pushed the software giant to its lowest closing level since 2023 before the shares rebounded on Friday.According to Bloomberg, investors remain concerned that while Microsoft is spending heavily on AI infrastructure and products, the returns from those investments may take longer than expected to materialise. There are also growing questions about whether AI could eventually reduce demand for traditional software products such as Microsoft Office.The concerns intensified after Microsoft’s fiscal third-quarter results in April, when Azure cloud growth disappointed investors and the company projected $190 billion in capital expenditure through the end of December, exceeding Wall Street expectations.Also Read: Dow Jones| Nasdaq | US Stock Market Today | Live: US stocks open higher as US, Iran halt attacksDespite the sharp correction, Microsoft now trades at about 19 times forward earnings, below the S&P 500's forward multiple of around 20 and well below its own 10-year average valuation, Bloomberg reported.The beaten-down valuation has attracted some investors. Michael Burry, best known for his successful bet against the US housing market before the 2008 financial crisis, disclosed purchases of long-dated Microsoft call options, helping lift the stock nearly 6% on Friday, its strongest single-day gain since May 2025.While concerns over AI-related spending and profitability persist, analysts still expect Microsoft's revenue growth to remain strong. Consensus estimates project revenue to grow 17% in the current fiscal year, with growth expected to accelerate further over the next few years, highlighting the market's continued confidence in the company's long-term AI opportunity despite near-term uncertainty.
Microsoft shares head for worst month since 2000 as AI concerns wipe out $570 billion
Microsoft shares are heading for their worst month since 2000, falling 17% in June as concerns over heavy AI spending and delayed returns erased $570 billion in value. Weak Azure growth and high capital expenditure outlook weighed on sentiment, though some investors see value at lower valuations.
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