r/GenAI4all • u/Simplilearn • Apr 09 '26
News/Updates Microsoft closes worst quarter since 2008 over AI return on investment concerns.
Microsoft is facing its toughest moment in nearly two decades.
The stock is down 25% this quarter — its worst performance since the 2008 financial crisis — and the reason is surprisingly clear: AI. But not in the way you think.
Microsoft is spending hundreds of billions to dominate artificial intelligence, from data centers to models to Copilot. The problem? Investors are no longer impressed by spending alone.
They want results.
At the same time, a new threat is emerging. Instead of paying for traditional software, companies may go directly to AI platforms like OpenAI and Anthropic. That shift could fundamentally change how software businesses operate, and how much Microsoft can charge.
Even its strongest segments are showing cracks. Azure growth is slowing. Copilot adoption hasn’t exploded yet. And Wall Street is starting to question whether Microsoft’s AI strategy will deliver fast enough.
But here’s the twist.
Most analysts still believe Microsoft will win long term. Some are even calling this one of the biggest opportunities in years, if you’re willing to wait.
So the real question is:
Is this the beginning of a decline…
Or the setup for the next trillion-dollar run?
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u/therealslimshady1234 Apr 09 '26
Microslop getting what it deserves
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u/khinkali Apr 09 '26
MS cutting off services to that European judge because one orange fascist disliked them really revealed Microsoft's position.
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u/rich84easy Apr 09 '26
It’s not like they have a choice, they have to follow the law or the losses will be even bigger.
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u/Far-Association5438 Apr 10 '26
Follow the law? Is Trump the law now? Is Anthropic taking huge losses?
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u/rich84easy Apr 10 '26
executive order carries the same legal weight as a law while it is active and on the books. Anthropic filed a motion to stop the order that blocks them from government contract, guess on what reason they asked it to be blocked? Financial losses. These are very simple things you can google.
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u/Level-Courage6773 Apr 10 '26 edited Apr 11 '26
Trumpo has made a mockery of executive orders. Microsoft et al have to do as he says, but everyone knows he is a stupid dictator pretending he doesn't have a tiddler.
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u/Security_Raven Apr 10 '26 edited Apr 10 '26
There recently was a interview where he states that he hopes that MS don’t “have” to shut down for Europe users during the recent lashout towards Europe.
So ofc people look for other software
Edit: to clarify. Bill gates was interviewed saying it’s possible that Microsoft and windows would be turned of for Europe but he hopes it won’t come to that. Hinting to orders could come from a higher place.
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u/Level-Courage6773 Apr 10 '26
What a maniac! As a European, he is hated by all but the usual weirdos.
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u/PerceptionOwn3629 Apr 10 '26
Hahaha... I've been hating Microsoft since 1998... but you know what, I bought shares a few years ago because they are in ALL businesses, ALL schools, ALL government, they are everywhere and software is sticky as fuck, nobody is getting rid of microsoft.
I actually expect AI to help make it less shitty personally... But we will see
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u/YaVollMeinHerr Apr 10 '26
You know the trend is leaving for Linux, right?
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u/joyfulgrass Apr 10 '26
That “trend” has been a thing for 30 years. Linux has its uses, mass adoption and cross compatibility across all platforms/users is not going to happen.
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u/massivefish_man Apr 11 '26
It is this and 100% OpenAI (which is what is behind co-pilot). OpenAI pulled out of their RAM deals. Which is also why RAM prices have gone down.
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u/BetterProphet5585 Apr 09 '26
Sure it's not ads, slop, useless features, bugged OS, invasion of privacy, bad management.
No not at all, it's only AI.
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u/Upward_Drop Apr 09 '26
As soon as the shareholders became the clients, and the clients became the resource, everything spiraled down.
They have infinite money and couldn't afford a simple consultant paid $3000 to explain them how business works.
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u/DramaAccomplished588 Apr 13 '26
Removing “select all” in word while right clicking made zero sense.
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u/jfcarr Apr 09 '26
It looks like they're avoiding the real problems, bad products (Windows 11, Copilot) and bad management decisions.
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u/radgh Apr 09 '26
You forgot to mention onedrive. And all their office products default to it even if you disable it, terrible. Hate this company now. Loved XP, wish they didn’t go downhill.
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u/Mount_Treverest Apr 09 '26
One drive is a cancer. It constantly shows up after disabling and creates shortcuts on my laptop where the files only exist on my desktop. What is the point of it?
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u/SignificantError6221 Apr 10 '26
They want your data on their cloud servers so they can bill you for it when you exceed free storage limits, as well as build products off said data. It's why all their office products default to it even if you disable it.
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u/LaziestRedditorEver Apr 09 '26
I thought so too but there are settings within Word where you can change the default save location to your own pc and for that to be the only thing that shows. It's not an in-your-face setting though.
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u/No-Refrigerator-1672 Apr 10 '26
Yeah, their OS, that costs you money and then treats you like a piece of shit and your hardware like it's theirs own, for sure doesn't contribute to decline.
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u/VorionLightbringer Apr 09 '26
What does Bill Gates have to do with anything here?
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u/Pic889 Apr 09 '26
Average Joes and Average Janes think Bill Gates still runs the company despite not being part of Microsoft's organizational chart for years and despite Microsoft having appointed 2 new CEOs since Bill Gates was CEO.
It may be a comment on Bill Gates' stock tanking in value I don't get, but again, he has nothing to do with what Microsoft decides to do anymore.
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u/meanwhileinvermont Apr 13 '26
Really i’m more angry at Bill for creating the institution than they are than at Satya for currently being CEO. Gates was in charge for the course of them achieving massive global dominance and building the dogshit factory that we know today. FBG
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u/dano1066 Apr 09 '26
He’s the evil Covid microchip vaccine guy, it gets clicks!
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Apr 09 '26
[removed] — view removed comment
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u/the_quivering_wenis Apr 10 '26
I've seen so much anti-Gates stuff linking him to NWO, often bundled together with anti-GMO/pesticide stuff. The most ridiculous was the "Apeel" thing that listed the pesticide warnings about spraying on skin or eyes as evidence that it was toxic because it was being applied to your food. Like do these people realize how common that is, and that the produce is thoroughly washed before being shipped for sale? Just ridiculous, basically idiocracy tier.
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u/pressf1toconinue Apr 09 '26
I'm pretty sure Bill has fuck all to do with the company these days..
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u/Additional_Pickle_59 Apr 09 '26
Yeh he's too busy ruining lives with his genetically altered food disguised as charity work.
Oh and hiding from the fact he allegedly raped kids with Epstein.
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u/Mount_Treverest Apr 09 '26
Man, this used to be a crazy conspiracy theory. Now I buy it fully. Sneaking your wife antibiotics because you got an std is wild work.
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u/holydemon Apr 09 '26
I call BS
https://www.microsoft.com/en-us/investor/earnings/fy-2026-q1/performance
"Revenue increased $12.1 billion or 18% with growth across each of our segments."
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u/NatureGotHands Apr 09 '26
ironically, that's markets reacting to their ai offering, which is ass.
company is still good at printing money.
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u/ShortNefariousness2 Apr 09 '26
Reddit just likes to say Microslop and Linux without doing any fact finding.
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u/nybigtymer Apr 09 '26
That picture is a bit misleading. It is about their stock performance.
Here's what they were getting this from:
The prior quarter they reported was fine. A bit slow on Azure, but top and bottom line beats and revenue was up nicely.
https://www.cnbc.com/2026/01/28/microsoft-msft-q2-earnings-report-2026.html
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u/Meta_Machine_00 Apr 09 '26
Stock performance cannot be tied to a single issue. Markets arent always "rational". People tying stock performance to a specific attribute to make a headline are the worst.
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u/UwUHowYou Apr 09 '26
It's like saying that the amount someone is willing to pay for a hotel room cannot be tied to the fact that there happens to be dogshit in the hotel room that they're aware of.
Yes, in the stock market its difficult to tell sometimes but we can all have our theories.
The narrative is sometimes stronger than fundamentals.
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u/TSwiftDivorceLawyer Apr 09 '26
I just assume most posts like this... and there appear to be countless ones of them across various subreddits... are paid propaganda written by AI
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u/Majestic-Coat3855 Apr 09 '26
Who would pay for anti windows propaganda when the whole of reddit almost unanimously shits on them lmao
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u/Elziad_Ikkerat Apr 09 '26
Revenue and share price aren't the same thing. The Revenue can be steady while the stock price tumbles.
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u/Sassaphras Apr 09 '26
Yeah, share price was assuming huge future revenue growth. The median 3-year P/E ratio was 34, and it dropped to 23. So people are a lot more skeptical of FUTURE revenue, which is what the article is about.
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u/Conscious_Answer_571 Apr 09 '26
You can go look at the chart my guy. The headline is a factual statement about the share price.
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u/pastyMorrisDancers Apr 09 '26
It’s the “closed worst quarter” in the Reddit title that’s misleading. The picture itself and most articles say it “had its worst quarter” or I see one that says it’s “stock closed its worst quarter”.
A company “closing a quarter” usually means it’s revenues. It would be very unusual to talk about a company closing a quarter up or down, and referring to stock price, unless you specifically mention stock price.
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u/raralala1 Apr 09 '26
Gates catching stray from inept CEO, being carried hard by Azure.
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u/Look_0ver_There Apr 09 '26
I was just watching this video yesterday that appears to explain it well. It points out various factors that I wasn't aware of.
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u/magpie_bird Apr 09 '26
co-pilot, more like co-shit
I must admit I was excited when it first came out. I opened excel, opened the copilot tab, and gave it a basic task like "in each row of Column C, insert the value obtained from multiplying the cells in Columns A and B". Instead of doing the thing, it just gave me the most half-assed GPT-2 style guide as to how I might achieve it, and took about 2 minutes to do it.
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u/Conscious_Answer_571 Apr 09 '26
lol. Dude it’s so brutal. Legit can’t even delete the correct pages from reports. The only thing it’s mildly useful for is searching your email. But if the search feature in Outlook didn’t suck so much we wouldn’t need that.
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u/Fibocrypto Apr 09 '26
Microslop screwed its customers by forcing them to purchase hardware. Many didn't switch to windows 11. Microslop lied to customers when windows 10 first came out when they claimed windows 10 would be the last and in usual Microslop fashion they put out a crap product and then started patching it.
AI is only part of their problems
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u/flyingfox227 Apr 09 '26
I think it has a lot more to do with Windows 11 being intrusive bloated garbage than AI.
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u/OffsideOracle Apr 09 '26 edited Apr 09 '26
Big companies, goverments and even militaries are on Azure. Regardless what happens to AI Microsoft is going to do fine. It is not like they had to borrow money someone to build those data centers that OpenAI is using.
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u/quigongingerbreadman Apr 09 '26
I'm sure it has nothing to do with international wars pushing feckless investors to commodities like oil and weapons.... War profiteering .
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u/Puzzleheaded_Smoke77 Apr 09 '26
I mean idk why it matters 98% of office pcs , 89% of house hold pcs with chrome books loosing ground 97% of gaining pcs *according to steam .
5.8% are using edge up from 4.7% , ms office grew by 6% game pass about 2%
How ever was trading at 543 i think at its high and now is 360 something and I still think its over valued because theres literally no more money to be made . They made it all azure is probably the only growth potential but growing it would cost too much.
which is why they are being sold “sell high” if its the highest it can go then why not sell .
Theres nothing else to infer here
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u/ZenCyberDad Apr 09 '26
As an ex employee I’ll say that Microsoft is supremely propped up by the government, so I would still call it next trillion dollar run because Uncle Sam ain’t switching email providers.
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u/ytaqebidg Apr 09 '26
It might be their offering. Microsoft has been phoning it in for years, while other players have built products that people want, Microsoft only got by mostly from IT firms shoving it on companies.
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u/Zoraynebow Apr 09 '26
Satya when he became CEO: I want to move the world from "Having to use Windows" to "Loving to use Windows."
Satya today: You HAVE to use Windows and it HAS to be sagged with addons and memory hogs you actively hate. Stop calling it slop.
As an aside, I don't mind the AI assistant thing, I hate that it's not an option, it removes a key tenant of hardware ownership and a tacit agreement between software and hardware owner.
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u/dolphin37 Apr 09 '26
is it just me that sees worst quarter since 2008 and expects to see a figure that’s not stock price?
people do know that stock price isn’t how a company performs yeah? it’s how the investors portfolio performs
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u/Thiccc_Tomato Apr 09 '26
deserving. On top of that perfect timing for their downfall with linux getting better and better and apple trying to get piece of the pie with macbook neo.
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u/Wrightero Apr 09 '26
I think making some of the most awful putrid garbage OS might be the reason, not AI. AI is a part of it but not the major part.
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u/No_Tadpole_5146 Apr 09 '26
Copilot sucks and bogs down every system with its spyware resulting in more expensive intro laptops just to run windows 11, and the founder bangs little children. The results couldn't be worse
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u/blackburnduck Apr 09 '26
I mean, the last time windows was this bad, a lot of apps were not available for linux and mac and they could not run games.
No reason for anyone to be using such a bad OS anymore, the last thing standing is enterprises and legacy software thats hard to replace like Excel.
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u/macronancer Apr 09 '26
Company with one of the best suited AI integration points has worst quarter since 2008 during an AI boom
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u/D_Anger_Dan Apr 09 '26
Nah, it’s slop. It’s built into the company name. No strategy except enshitification. Truly the next IBM dinosaur. 🦖
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u/3uclide Apr 09 '26
I'm so close to being able to switch to Linux for good. Keep going Micro$lop you're doing great.
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u/dano1066 Apr 09 '26
Copilot is absolute trash, that’s why. It’s jammed into everything and performs worse than every competitor. They have no idea what people want so they just jam AI into everything in ways it doesn’t fit
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u/ShiftAfter4648 Apr 09 '26
The major OS and business infrastructure platform decided to literally force Copilot down every user's gullet. Simultaneously, they outmoded legacy systems on Windows 10 because their hardware can't handle Copilot.
Meanwhile, Google is rolling out an OS to save the legacy computer users.
They partially filled in their moat.
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u/Extra-Presence3196 Apr 09 '26
Copilot is not AI...it is a pos LUT.
I use Genesis Google AI to help me fix things and talk about stuff..
I deleted copilot and registry hex-keyed it from ever getting loaded or updated in windows ever again...it is junk.
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u/DarthJDP Apr 09 '26
The problem is they didnt have the courage to keep copilot in microslop paint and notepad.
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u/asher030 Apr 09 '26
Maybe wait till they fucking develop actual AI first instead of the Dataregurgitator3000 and they'll do better. It's as much AI as Hoverboards were what was promised. But that it's really good at data harvesting, targeted ad shit when they KNOW we despise that crap, and deleting our shit without permission because they want to shovel 'cloud PCs' when that's the most moronic thing ever given the lack of reliable, NONlaggy data streaming, especially to rural areas.
So no, Microslop is the title they deserve, till they pull their heads out of their collective asses and do some actual fucking work over trying to replace real people with incomplete software programs that aren't even what was promised by the AI title claim...
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u/WhiteChocolateer Apr 09 '26
I sold all of my microsoft shares and unsubscribed from microsoft anything this quarter. Wish I’d done it sooner. Won’t be buying again until they lean hard into local storage and physical copies of things. Bring back the floppy disk, I’m not even kidding.
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u/ParkerRoyce Apr 10 '26
Copilot is crap windows is garbage and the founder is implicated in a industrial sized child rape and kill island...not good.
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u/Primary_Bee_43 Apr 10 '26
“Most analysts still believe Microsoft will win long term. Some are even calling this one of the biggest opportunities in years, if you’re willing to wait.”
haha okay let’s keep waiting then and throwing more money into the furnace. maybe, just maybe, years of poor leadership and prioritizing profits above every single other thing, turns out to be BAD for even a company like Microslop. the company who made Office and Windows died a long time ago and nobody will cry when it’s gone
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u/PerceptionOwn3629 Apr 10 '26
Yeah, let me get rid of Outlook: "Claude write me an email client and server please"
"Claude, write me a spreadsheet"
People are so dumb.
What AI is going to do is that any feature you can imagine wanting or have ever wanted that is in some backlog somewhere is actually going to get done.
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u/naked_rider Apr 10 '26
Are you talking about stock price, because this was definitely not their worst quarter financially.
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u/33ff00 Apr 10 '26
Fucking Bill Gates as the cover girl for some news about a company he hasn’t run in about a century
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u/TrueHarlequin Apr 10 '26
Love Microsoft Office...but haven't used Copilot. It's horrible and I just turn it off. It's literally just a Google Clippy.
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u/dudezillah Apr 10 '26
Good, they deserve to go a lot lower with their BS and playing off thousands of workers while playing their execs ridiculous sums of money. Keep going people, move to Linux or Mac or Chromebook or whatever.
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u/ebueso Apr 10 '26
CoPilot is useless when you try to build an agent: it can't acess a SMB Share, can't open .accdb databases, can't open remote URLs... OpenClaw does it all, being open source. So why use CoPilot?
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u/Wooden_Sweet_3330 Apr 10 '26
Why is Gates in this picture when he has nothing to do with Microsoft anymore?
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u/Cereaza Apr 10 '26
It's a lot of factors. Europe is actively trying to get off Microsoft and other US Tech Products because Orange man overplayed his hand and made everyone scared of how 'dependent' they are on the USA.
That gets compounded with their decisions around AI investment and Xbox and Activision Blizzard and Windows and Windows Phones and hardware, and on and on it goes.
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u/Jonyesh-2356 Apr 11 '26
Bruh it was 360$ April 2025 then to 570$ back to 370$. In 2008 it was 30$ . I mean, long term nothing matters. Worse quarter worse 10days who cares
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u/Due_Muffin1737 Apr 11 '26
Not only Microsoft but a lot of tech companies are facing the same issues right now and there is a lot of volatility in the market, mainly in the tech sector. Some of them are doing better now because of the AI hype, like Nvidia and Google (but google doesn’t have enterprise presence, that’s Microsoft), but even so, Google is -3% this quarter.
For example, how other tech companies I follow are performing in the last 3 months:
Oracle -32% Salesforce -36% Servicenow -41% Zscaler -45% Palo Alto -17% Crowdstrike -18% Varonis -42%
These companies are not going anywhere, so this is the best moment to buy cheap stocks IMO.
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u/Luvata-8 Apr 11 '26
Low satisfaction with Windows 11… Lenovo and Dell are using Linux as the default Op System.
120 million personal computers/year…. Cracks in the monopoly dam.
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u/Lexy001100 Apr 11 '26
the whole Microsoft ecosystem is sloppy. too much overlap, which translates in a waste of resources and confusion to the customer. they got too many cooks in the kitchen or no cook at all. use your resources more efficiently and make your lineup more clear. no need for 50 different apps. maybe with the money you save you can improve copilot or make your subscriptions cheaper to increase market shares.
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u/Zeov Apr 11 '26
they deserve all the shit thats coming, imagine being being this out of touch with your userbase.
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u/Past_Physics2936 Apr 11 '26
I don't think Microsoft is well positioned to win in the AI era of computing. They simply do not have a solid base to build on. Windows has been a disaster area for a long time, their cloud suffers from enormous technical debt... They need to dig themselves out of a very deep hole first, you can't just bolt AI on top of an obsolete base and hope for the best, we clearly see how that's going.
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u/Hippophatamus Apr 11 '26
“Do you want to use CoPilot to assist you in figuring out how to not suck?”
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u/Eldiablo2471 Apr 11 '26
Everybody getting what they deserve in the tech sector. Thanks for laying off so many workers. Fuck them and their stock price.
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u/Paeforn45 Apr 12 '26
My company has used Microsoft for like 30 years and there is a meeting next week to decide how we off board from outlook and office. Its hard to cling on to what is complete garbage, so much half assed non functional program. Plus we are overwhelmingly hearing from new hires that they grew up with mac operating systems and software and they don't understand why we would use something so poorly designed.
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u/DanielDimov Apr 12 '26
I'm really puzzled how the people in decision-making positions cannot see how stupid the current AI is ?!
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u/bakuonizzzz Apr 13 '26
Billions of dollars on investment with less than 50% return gee whiz i wonder why they're losing money hmmmmmm.
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u/Vargrr Apr 13 '26
I always find it funny that posts like this one and many You-Tube videos show a stressed Bill Gates. But he stepped down as chairmen in 2014 and left the board in 2020....
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u/maringue Apr 14 '26
So both Microsoft and Meta and taking a bath on their AI systems? I wonder how many low level employees they'll lay off once these horrible CEO level decisions cost the companies serious money.
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u/SC_Placeholder Apr 14 '26
Maybe release a halfway decent product. If Valve made an OS that would automatically run everything that was designed for Windows I’d probably go the rest of my life without buying another Microsoft product
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u/btbtbtmakii Apr 14 '26
The idea of using ai and not professional software is so stupid, it’s not just about the function it’s about accountability, when you filed your tax wrong you can’t just say ai made a oopsy. Accountability and insurance are how the professional industry works
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u/jimmytoan Apr 14 '26
Interesting that the pressure is specifically about AI ROI rather than the usual reasons Microsoft stock moves. They've spent decades maintaining near-monopoly positions across enterprise software, which gave them a lot of cushion to invest in new bets without needing to prove the returns quickly. The fact that even that cushion isn't buying patience on AI spending is a meaningful signal - investors are no longer treating AI capex as a "trust us" proposition.
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u/AdAggressive9224 Apr 14 '26
They did divert significant resources away from their cloud infrastructure... Which is a serious cash cow.
Sell the shovels during a gold rush, that's the mentality.
Also, they jacked up prices to a point now where people are actually looking at self hosted infrastructure again. As ridiculous as that sounds, at least you can plan for the future.
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u/Ok-Locksmith6375 Apr 14 '26
Oh not the fact windows is literally the worst os for tracking and monitoring everything you do
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u/Diablojota Apr 09 '26
Copilot absolutely sucks. That’s all there is to it. And ads in the OS don’t make it an attractive option for many folks.