05.02.2025 10:15:00

Microsoft Stock Is Falling as Artificial Intelligence (AI) Growth Is Getting More Expensive

Share prices of Microsoft (NASDAQ: MSFT) were down 6% immediately following its fiscal second-quarter earnings report on Jan. 29. The software leader delivered revenue and earnings that topped Wall Street's expectations, but it wasn't enough for investors to justify bidding the share price to new highs.The main issue seems to be valuation. Microsoft has accelerated its capital expenditures over the past few years to support artificial intelligence (AI) initiatives. Investors have bid the share price up to a high price-to-earnings (P/E) multiple of 33 anticipating those expenditures to drive strong growth, but the company's earnings have increased just 10% year over year for the last three quarters.Investors may be starting to lose patience waiting for these investments to pay off. Here's why the stock could continue to disappoint investors in 2025.Continue readingWeiter zum vollständigen Artikel bei MotleyFool

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