"Microsoft ( NASDAQ:MSFT) shares are fresh off a historic decline following the release of some poorly-received quarterly earnings results. Undoubtedly, at its worst, shares shed more than 12% of their value in the session that followed the big reveal. The big headline was that $357 billion in value was wiped out. That's the worst day for the enterprise software icon and AI innovator since the 2020 stock market crash."
"It's a steep drop, especially for such a well-established blue chip in tech, and perhaps too much for most retail investors to handle, especially since shares were flirting with a bear market earlier in January. With the stock now officially in a bear market, down close to 21% from its all-time high, the big question on investors' minds is whether the drop is a buying opportunity or if it's best to wait things out, given the magnitude of the single-day drop."
"In any case, I'm more inclined to view Microsoft as a misunderstood name as investors start severely punishing heavy AI CapEx while having zero tolerance for anything short of quarter-over-quarter strength. Undoubtedly, I think it's just unrealistic not to grant a firm a bit of wiggle room when it comes to earnings."
Shares fell sharply after quarterly results missed expectations, with a one-day loss exceeding 12% and $357 billion of market value erased. The stock moved into bear market territory, down about 21% from its all-time high, prompting investor debate over whether to buy or wait. Some investors favor waiting three trading days after a big drop, while others see value near $430 per share despite possible further weakness as other tech firms report earnings. Concerns center on a slight miss in Azure growth and heavy AI capital expenditures, and volatility is expected for long-term investors.
Read at 24/7 Wall St.
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