Microsoft’s stock has cratered 16.2% in just 21 trading days, tumbling to $401.72 as of February 27, 2026. Investors fret over Azure’s slowing growth and ballooning AI costs tied to its OpenAI partnership. But is this a buying dip or a sign of deeper trouble for the $3 trillion tech titan?
Solid Foundations Amid the Storm
Microsoft boasts powerhouse fundamentals. Trailing 12-month revenue hit $305 billion, up 16.7%, with a stellar 46.7% operating margin. Liquidity shines too, a debt-to-equity ratio of 0.02 and cash-to-assets at 0.13. Yet, at a P/E of 25.0 and P/EBIT of 20.0, it’s fairly priced, per Trefis analysis.
Wedbush forecast on December 22 that Microsoft Corporation would see significant revenue growth due to AI. Microsoft is one of Wedbush’s top picks among big tech companies because, according to analyst Dan Ives, investors are particularly undervaluing the Azure growth story.
Proven Resilience in Crises
History favors bulls. During the 2022 inflation shock, MSFT dropped 37.6% versus the S&P 500’s 25.4%, rebounding fully by June 2023.
In 2020’s COVID crash, it fell 28.2% against the index’s 33.9%, recovering in months.
The 2018 correction saw an 18.6% dip, fixed by March 2019.
Even the 2008 crisis 59.1% plunge ended with a peak gain by 2013. MSFT consistently outperforms on recovery speed.
Outlook
A deeper pullback could test sentiment, but resilience indicators suggest it may outperform the broader market. Microsoft continues to post strong Azure growth, reinforcing its cloud leadership.
Key risk: Heavy AI investment could pressure margins if demand slows. Still, durable Office subscriptions and gaming strength following the Activision Blizzard integration support the long-term outlook.
On weakness, accumulation may favor patient investors as its AI and cloud moat remains strong.
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