Netflix Falls 41% to 18-Month Low as Microsoft Drops a Third on AI Fears
Updated
Updated · The Motley Fool · Jun 22
Netflix Falls 41% to 18-Month Low as Microsoft Drops a Third on AI Fears
3 articles · Updated · The Motley Fool · Jun 22
Summary
Netflix shares have slid 41% over the past year to an 18-month low after April earnings disappointed and management forecast revenue growth slowing to 13.5%.
That pullback came despite first-quarter revenue rising 16% to $12.3 billion and operating margin reaching 32.3%, while investor sentiment was also hit by failed takeover efforts involving Warner Bros. Discovery and Roku.
Microsoft has also weakened sharply, falling roughly one-third from its October peak as investors worry AI-native rivals could disrupt software and fault the company for limited AI progress.
Its underlying business remains solid: third-quarter revenue rose 18% to $82.9 billion, adjusted EPS climbed 18% to $4.27, and Azure plus Microsoft 365 continued to post strong growth.
The declines stand out in a richly valued market, with the S&P 500 at a 27 P/E and the Nasdaq-100 at 34, leaving both stocks looking cheaper than many large-cap peers.