Microsoft Drops 17% Despite 123% AI Growth, Drawing Screaming Buy Call
Updated
Updated · The Motley Fool · Jun 11
Microsoft Drops 17% Despite 123% AI Growth, Drawing Screaming Buy Call
1 articles · Updated · The Motley Fool · Jun 11
Summary
Microsoft shares are down about 17% this year even as a Motley Fool analysis argues the selloff has made the stock unusually cheap.
Fiscal 2026 third-quarter results showed Azure revenue up 40% year over year, while Microsoft's AI business grew 123% to a $37 billion annual revenue run rate.
On a price-to-cash-from-operations basis, the stock is trading near its cheapest level since 2019, a metric the analysis says better reflects hyperscalers investing heavily in data centers.
That valuation leaves Microsoft roughly in line with Amazon but cheaper than Alphabet and Apple, reinforcing the case that the market has discounted strong AI fundamentals too far.