Microsoft Falls 17% in 2026 as Azure Grows 40% and Analysts See Value
Updated
Updated · The Motley Fool · Jun 11
Microsoft Falls 17% in 2026 as Azure Grows 40% and Analysts See Value
3 articles · Updated · The Motley Fool · Jun 11
Summary
Microsoft shares are down about 17% this year even as the S&P 500 has gained roughly 7%, a sharp reversal in market sentiment toward one of the biggest AI bets.
Fiscal 2026 third-quarter results still showed strong AI momentum: Azure revenue rose 40% year over year, and Microsoft's AI business grew 123% to a $37 billion annual revenue run rate.
That disconnect has pushed Microsoft's price-to-cash-from-operations multiple to its cheapest zone since 2019, using a metric some investors favor for capital-intensive AI infrastructure spending.
On that basis, Microsoft now trades roughly in line with Amazon and below Alphabet and Apple, supporting the view that the selloff reflects valuation compression more than weakening fundamentals.