Microsoft Corp. is on the brink of its longest daily loss in more than a decade as growing concerns about the AI market continue to impact major tech stocks.
The report follows the release of data on Friday, November 7, which highlighted a significant decline in the software giant’s stock price by up to 0.8%.
The decline prompted analysts to warn that if the company closes lower, it would be Microsoft’s longest decline since a nine-day slide that ended in November 2011. Over the past eight days, the stock price has fallen 8.6%, resulting in a loss of approximately $350 billion in market capitalization.
Amid stock price pressure, Microsoft recently signed a deal worth about $9.7 billion to acquire artificial intelligence computing power from the United States. IREN Co., Ltd.the Australian company is its largest customer.
IREN said in a statement Monday that the five-year agreement gives Microsoft access to Nvidia Corp.’s Texas-based systems built for AI workloads and includes a 20% upfront payment. Sydney-based IREN has agreed to buy necessary advanced chips, known as graphics processing units, and related equipment from Dell Technologies Inc. for $5.8 billion.
Microsoft has signed multibillion-dollar deals with data center operators like IREN and CoreWeave Inc. over the past few months to secure as much computing power as possible to win the race to build and power AI systems. Just days ago, the Redmond, Wash.-based company said it was still struggling to find enough capacity to meet all the demand for its cloud services.
Microsoft currently faces significant challenges due to AI weaknesses
microsoft stock It has fallen since it released its quarterly results in late October. While the report includes some positive strengths, including growth in the Azure cloud computing business exceeding analysts’ expectations, Wall Street is increasingly concerned about the money companies are investing in building out AI infrastructure.
Microsoft’s investment moves accounted for about $34.9 billion of capital spending in the quarter, the people said. Additionally, the company indicated that spending may increase again this fiscal quarter.
Analysts said the decline in Microsoft’s stock signaled a shift in sentiment toward the AI company that had given the market a big boost earlier this year. Meanwhile, the Bloomberg Magnificent 7 Total Return Index and the Nasdaq 100 Index both fell 4% this week, their biggest weekly declines since April.
By contrast, shares of Apple, which has not invested as heavily in AI, rose, rising 0.9% on Friday. Despite AI’s weaknesses, this achievement positions technology companies as a safe option.
Apple has not been affected by the recent significant decline
A report dated Nov. 6 of this year notes that the recent sharp declines have affected several strong-performing AI stocks, including Palantir Technologies and Nvidia. What is interesting is that Apple was not affected. While other tech companies faced declines, the iPhone maker faced a modest increase. Meanwhile, the Nasdaq 100 index fell 1.6%.
This situation was similar to the previous trading period when Apple experienced a slight increase even though the overall index fell by about 2.1%. Meanwhile, it’s worth noting that Apple stock has risen, topping the 5% mark over the past month, while the tech-heavy index was little changed, rising less than 0.5%.
Analysts commented on Apple’s impressive performance, saying it shows that the company has returned to normal stability. To achieve this stability, the technology company has adopted mechanisms to generate cash and ensure a strong financial foundation that can withstand market challenges..
However, Apple reportedly lagged behind other companies for much of this year as investors shifted focus to the benefits of AI.
Still, the tech giant is back after previously sharing a positive outlook. Survey results show poor performance in China. According to a recent report, the iPhone maker made a net profit of about $27.5 billion last quarter, with total revenue reaching $102.5 billion.
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