Microsoft Corporation (MSFT) Fell on Heavy AI Capex and Softer Azure Growth

Columbia Threadneedle Investments, an investment management company, released its first-quarter 2026 investor letter for the “Columbia Global Technology Growth Fund”. A copy of the letter is available to download here. In Q1 2026, the Fund’s institutional Class shares fell –6.05%, outperforming the S&P Global 1200 Information Technology Index, which declined –6.57%. Positive performance was mainly due to security selection in semiconductor and AI infrastructure companies, along with an underweight position in software and IT services. Broad markets declined amid a reversal in market dynamics, with energy and commodities surging while growth and tech fell sharply. The letter highlighted that, despite geopolitical risks and uncertainty, the U.S. economy continues to show resilience. In addition, you can check the Fund’s top 5 holdings for its best picks for 2026. In its first-quarter 2026 investor letter, Columbia Global Technology Growth Fund highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On June 15, 2026, Microsoft Corporation (NASDAQ:MSFT) closed at $399.76 per share. One-month return of Microsoft Corporation (NASDAQ:MSFT) was -5.64%, and its shares lost 17.61% over the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a market capitalization of $2.97 trillion. Columbia Global Technology Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter: "Microsoft Corporation (NASDAQ:MSFT) shares declined about 25% during the quarter, marking the company’s steepest quarterly loss since the fourth quarter of 2008 and making it the worst performer among the Magnificent Seven stocks (Alphabet, Amazon, Apple, Microsoft, NVIDIA, Meta Platforms and Tesla). Microsoft reported strong quarterly results but guided to quarterly capital expenditures of $37.5 billion, a 66% increase to fund its AI data-center buildout. Microsoft’s cloud-computing business Azure showed modest deceleration for the first time in years. In response to competitive pressures, Microsoft reshuffled its AI leadership team to better innovate on Copilot adoption, which has lagged expectations despite reaching 450 million users, the vast majority on the free tier." Microsoft (MSFT) Stock: Truist Raises Price Target to $675, Reiterates Buy Microsoft Corporation (NASDAQ:MSFT) ranks second on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 282 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter, compared to 312 in the previous quarter. In the third quarter of fiscal 2026, Microsoft Corporation (NASDAQ:MSFT) reported revenue of $82.9 billion, marking an increase of 18% and 15% in constant currency. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.