Microsoft (NASDAQ: MSFT) stock is on a downward trend in December. MSFT has shed nearly 8% in a month and is heading backward in the charts. Not just Microsoft, several companies such as Nvidia, Amazon, and AMD, among others, are also experiencing a dip. All these firms that have mostly invested in AI have seen a major price decline this quarter.
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Here’s Why Microsoft (MSFT) Stock Price is Declining
The downturn in Microsoft’s stock price comes after investors’ reaction to fresh concerns about the company’s AI revenue trajectory. Rumors were swirling around Wall Street that the tech giant could scale back on sales of key AI offerings. High spending and less sales is worrying investors as the investments don’t match the revenues.
However, Microsoft denied that it is scaling back on AI sales and investments, replying to The Information article. “We did not lower AI sales quotas,” the company’s spokesperson said, according to CNBC. A major chunk of investors is worried that Microsoft’s AI spending and revenues don’t match the investment. The development is affecting Microsoft stock and remains on a slippery slope this month.
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The company has instead accelerated its AI-driven growth and is aiming at rapid expansion for customer adaptation. MSFT stock had reached a high of $542 in October and has now plunged to $477. It is now caught in the crosshairs over the concerns of an AI bubble burst. The multinational corporation is in the middle of it all and is operating highly in the new technological landscape.
A handful of analysts have predicted that the AI bubble could burst soon and affect all tech giants, including Microsoft stock. If that happens, the bloodbath would be much more intense than the market has previously seen.