Microsoft's AI Bet Faces Market Skepticism
Microsoft Corp. is heading for its most prolonged period of daily stock declines in more than fourteen years, signaling a notable shift in investor confidence toward the high-flying artificial intelligence sector that has largely driven market gains throughout this year.
The software giant's shares dropped as much as 0.8 per cent during trading on Friday, November 7, 2025. If the stock closes lower, it would mark the ninth consecutive day of losses—the longest such streak since November 2011.
Substantial Market Value Evaporates
This extended selloff has taken a significant toll on Microsoft's market valuation. Over the eight-day decline that preceded Friday's session, the company's stock had already fallen by 8.6 per cent, wiping out approximately US$350 billion in market capitalization.
The downturn began immediately after Microsoft released its quarterly results in late October. Despite reporting several positive metrics, including better-than-expected growth in its crucial Azure cloud-computing division, investors have focused their concerns elsewhere.
Massive AI Spending Raises Eyebrows
Wall Street is growing increasingly wary of the enormous capital investments required to build out AI infrastructure. Microsoft disclosed that it spent a staggering US$34.9 billion on capital expenditures during the quarter, with company leadership indicating that spending would increase again in the current fiscal period.
This substantial financial commitment to artificial intelligence comes amid broader concerns about whether the massive investments will generate sufficient returns in the foreseeable future.
Broader Tech Sector Feels the Pressure
The declining sentiment toward AI-focused companies is affecting the broader technology landscape. Both the Nasdaq 100 Index and the Bloomberg Magnificent Seven Total Return Index have fallen approximately four per cent this week, putting them on track for their most significant weekly percentage declines since April.
Interestingly, Apple Inc. has emerged as an unexpected beneficiary of this trend. The technology company, which has taken a more measured approach to artificial intelligence development, saw its shares rise as much as 0.9 per cent on Friday as investors seek safer alternatives amid the AI sector volatility.
The current market behavior represents a notable recalibration of expectations for artificial intelligence companies that have been market darlings for much of the year, suggesting investors may be entering a more cautious phase regarding the technology's immediate financial prospects.
