Microsoft has suffered its steepest monthly fall in more than twenty years. The company’s shares dropped by 17% in June 2026, wiping out nearly 570 billion dollars in market value. This marks the worst monthly performance since December 2000, when the dotcom bubble collapsed.
The sharp decline is mainly due to investor concerns about Microsoft’s heavy spending on artificial intelligence projects. The company has committed close to 190 billion dollars in capital expenditure this year, far above market expectations. While Microsoft believes AI will secure its long‑term growth, investors fear that profits may take longer to appear.
Adding to the pressure, growth in Azure cloud services has slowed, raising doubts about whether AI investments will quickly boost earnings. Some analysts also warn that AI tools could reduce demand for traditional products such as Word and Excel, creating further uncertainty.
Despite the steep fall, Microsoft’s valuation has now dropped to its lowest level in a decade, trading at about 19 times forward earnings, cheaper than the broader S&P 500 index. This has attracted contrarian investors including Michael Burry, who recently purchased long‑term Microsoft options, showing confidence in its future.
Although short‑term worries remain, analysts still expect Microsoft’s revenue to grow 17% this fiscal year, keeping long‑term optimism alive among many market watchers.
