Microsoft stock down 30% from peak as earnings test AI thesis

Microsoft reports earnings Thursday with its stock down 30% from a record $556, its market cap fallen to $2.9 trillion from $3.89 trillion.

The decline has erased about $990 billion in market value since October 2025, when the stock hit its all-time high. Microsoft now trails Apple, which reclaimed the title of the world's most valuable company this week ahead of its own earnings report, according to web search results.

The stock closed at $390 on July 27, down from the $556 peak. The 30% slide comes as investors await clarity on how Microsoft's AI investments are translating into Azure cloud revenue and overall earnings growth. Azure remains the key growth driver, with AI services expected to contribute an increasing share of cloud revenue.

Thursday's report will test whether the AI thesis that drove Microsoft to its record high remains intact. A strong earnings beat could reverse the bearish trend, while a miss risks accelerating the decline. Microsoft carries a weighting of about 7% in the S&P 500 Index, meaning a significant move in either direction would have broad market implications. Investors will watch Azure revenue growth, AI contribution, and forward guidance for signs of sustained momentum.

This article is for informational purposes only and does not constitute investment advice.