The Redmond-based technology giant is now the worst-performing stock among the "Magnificent Seven" in 2026, down 17% year-to-date.
But more concerning than the absolute decline, however, is the magnitude of its underperformance versus the broader market.
Since early August 2025, Microsoft has lagged the SPDR S&P 500 ETF Trust (NYSE:SPY) by more than 30%. That marks its worst stretch of relative performance since 2000, the height of the dot-com bubble.
Microsoft's Worst Stretch Since 2000: Is The Market Pricing AI Out Of The Story?
The company has now underperformed the S&P 500 for seven consecutive months, including a 6% negative relative gap thus far in February 2026.
A seven-month losing streak against the benchmark has NEVER occurred in Microsoft's 40-year public market history.
Even more striking: Microsoft’s relative strength versus the broader market has fallen to its lowest level since November 2022.
That was the month OpenAI launched ChatGPT, igniting the artificial intelligence boom.
The message from the chart below appears stark. Microsoft now trades as if the artificial intelligence revolution never happened.
Why Is Microsoft Selling Off?
According to veteran Wall Street strategist Ed Yardeni, investors have focused on Microsoft's aggressive capital expenditures.
Last quarter, capex jumped ...
