Microsoft’s 13% decline this year weighs on the $20 trillion megacap group, which trails the S&P 500’s 9% gain.
The Magnificent 7, a group of megacap tech leaders including Microsoft, has underperformed the broader market in 2024, rising just 5% compared to the S&P 500’s 9% gain. Microsoft’s 13% decline is the steepest among the group, driven by waning AI leadership and setbacks in its OpenAI partnership.
The group’s combined market cap exceeds $20 trillion, rivaling China’s GDP. Microsoft’s struggles follow a $10 billion investment in OpenAI in 2023, adding to $3 billion in prior funding rounds. Analysts cite unbundling risks as the company’s AI integration into Azure cloud computing faces delays.
The underperformance raises questions about the group’s dominance, with Microsoft’s lagging position contrasting its earlier role as an AI frontrunner.