Microsoft stock suffers historic June rout as investors balk at heavy AI spending
Microsoft shares fell sharply in June as investors grew wary of the company's heavy capital spending on artificial-intelligence infrastructure. One analyst said holders who once prized its free cash flow are now "being asked to underwrite a capital-intensity cycle."
Microsoft's stock endured a historic June rout as investors balked at the scale of the company's capital spending on artificial-intelligence infrastructure. A firm once prized for its free-cash-flow profile is now being judged on a heavy investment cycle.
Those who owned the shares for that cash generation "are being asked to underwrite a capital-intensity cycle," one analyst said. Outlays on data centers and chips are weighing on near-term profitability expectations.
The selloff coincided with a broader pullback in technology shares. Investors are now watching for signs of when Microsoft's AI investments will translate into returns.
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