FX.co ★ Microsoft stock loses luster amid investor AI fatigue

An intriguing situation is unfolding in the stock market, with Microsoft shares under pressure. According to Bloomberg, the tech giant’s equities have lost their luster amid cooled investor enthusiasm for artificial intelligence.

In recent months, the appeal of the company's shares has diminished, which analysts attribute to fading investor interest in AI trading. Market participants are now seeking more lucrative investment opportunities within the broader IT sector.

Over the past six months, shares of the leading software developer have added just 1.3%, compared to a nearly 10% gain for the Nasdaq 100 index, Bloomberg reported. This lackluster performance is due to Microsoft's mixed economic results in the latest quarter of 2024, coupled with investor fatigue around AI. Market players are looking for further evidence of demand for AI-related products and services.

This year, Microsoft shares have been up 14%. This follows an impressive 57% surge in 2023. Nevertheless, Wall Street analysts remain bullish on the company's long-term prospects. The outlook for Microsoft stock remains favorable, with experts expecting the IT giant's revenue to grow 14.5% in fiscal 2025 and accelerate to 19% by 2028. Net earnings per share are also likely to see double-digit growth.

At the same time, Microsoft is grappling with internal challenges. In early September, the company laid off 650 employees in its gaming division. Despite this, the tech giant has assured the market that it has no plans to shut down its video game studios or halt the development of games, gadgets, and related products.