Summary

• Microsoft Corporation has experienced a $1.3T market cap drawdown, the largest in its history, despite a generally bullish market.
• MSFT stock now trades at a forward earnings multiple of 21.7, near its 2022 buy levels, presenting a potentially attractive valuation.
• Recent concerns center on elevated FY26 capex guidance of $190B and significant exposure to OpenAI, which accounts for 45% of commercial RPO.
• Market sentiment has shifted as software faces AI disruption and OpenAI's reputation has diminished, intensifying scrutiny on MSFT's AI strategy.
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Introduction

Microsoft Corporation (MSFT) used to be a very easy stock to have in our portfolios. Remember when it traded to the low $200s during the 2022 bear market? That was such an easy buy that

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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