--- title: "Microsoft Q1 cumulative decline of 23% marks the worst quarterly performance since the 2008 financial crisis" type: "News" locale: "en" url: "https://longbridge.com/en/news/281259216.md" description: "Microsoft recorded its worst quarterly performance since the 2008 financial crisis in Q1, with a cumulative stock price decline of 23%. Amid intensified AI competition and macroeconomic pressures, there is widespread discussion in the market regarding its AI strategic prospects. Despite facing dual pressures, Microsoft's stock price rose by 3.12% during the market rebound. Analysts point out that Microsoft needs to increase investment in AI infrastructure and achieve product commercialization. The growth of Copilot users has been slow, and Microsoft is adjusting its AI team to meet challenges. Despite the overall impact of AI on the software industry, some analysts remain optimistic about Microsoft" datetime: "2026-03-31T22:26:27.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281259216.md) - [en](https://longbridge.com/en/news/281259216.md) - [zh-HK](https://longbridge.com/zh-HK/news/281259216.md) --- # Microsoft Q1 cumulative decline of 23% marks the worst quarterly performance since the 2008 financial crisis Under the intensified competition in artificial intelligence and the pressure from the macro environment, Microsoft's (MSFT.US) stock price has come under significant pressure, recently recording its worst quarterly performance since the 2008 financial crisis, sparking widespread discussion in the market about its AI strategy prospects. According to data obtained by Zhitong Finance APP, Microsoft's stock price fell by 23% in the first quarter of this year, a decline that significantly exceeds that of major tech peers. However, on Tuesday, buoyed by an overall market rebound, Microsoft's stock price rebounded by 3.12%, marking its largest single-day gain since July of last year. Analysts point out that Microsoft is currently facing "dual pressures." On one hand, it needs to continuously expand its investment in AI infrastructure to support rapidly growing demand; on the other hand, it must achieve commercialization of AI in its products. The conflict in the Middle East has driven up oil prices, which has also raised the costs of data center construction and operation to some extent, further compressing profit margins. On the product front, Microsoft's AI assistant Copilot has underperformed expectations. In the face of competitors like Google (GOOG.US, GOOGL.US), OpenAI, and Anthropic, Copilot's user growth has been relatively slow, with only about 3% of enterprise Office users currently purchasing the product license. To address this situation, Microsoft has recently adjusted its AI team, shifting Mustafa Suleyman, who was originally responsible for Copilot's consumer business, to model development, and bringing in a new leader to oversee product experience. This adjustment has sparked different interpretations in the market, with some viewing it as a strategic optimization, while others believe it reflects slower-than-expected business progress. Meanwhile, the entire software industry is also affected by the impact of AI. Several software stocks, including Adobe (ADBE.US), Atlassian (TEAM.US), and ServiceNow (NOW.US), have seen declines of over 30% this year. However, some analysts hold a relatively optimistic view of Microsoft. DA Davidson analysts believe there is a significant divergence between Microsoft's fundamentals and stock performance. The company's latest quarterly revenue growth approached 17%, accelerating compared to last year, and its core products, Windows and Office, still exhibit strong user stickiness. In terms of cloud business, Microsoft continues to maintain strong growth. Its Azure cloud service saw a revenue increase of 39% in the most recent quarter, and the backlog of orders doubled year-on-year to $625 billion, primarily benefiting from demand for collaboration with AI companies like OpenAI and Anthropic. Nevertheless, the competitive landscape is changing. The exclusive partnership between Microsoft and OpenAI in cloud infrastructure is no longer in place, and both parties are gradually shifting towards competition in certain areas, which also brings uncertainty for future growth. Microsoft CEO Satya Nadella stated that the current competition in the AI field is fierce, but it is not a zero-sum game, and the company still has the ability to maintain its lead in the competition ### Related Stocks - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) ## Related News & Research - [Microsoft Q3 Earnings Preview — Can Strong Results Restart the MSFT Stock Rally?](https://longbridge.com/en/news/284180112.md) - [Microsoft Q3 Earnings Preview: What To Expect From Upcoming Report](https://longbridge.com/en/news/284432552.md) - [Microsoft says it has over 20M paid Copilot users, and they really are using it](https://longbridge.com/en/news/284656841.md) - [Analyst Reaffirms Buy on Microsoft, Trims Price Target to $500 Amid Strength in AI and Cloud Momentum](https://longbridge.com/en/news/284739872.md) - [Microsoft Copilot: The Dark Horse Of Software Giant's Q3 Earnings?](https://longbridge.com/en/news/284557291.md)