Microsoft’s AI-driven revenue surges 18% annually, yet its stock trades at a steep discount to all-time highs amid market neglect.
Microsoft and Meta Platforms, two leaders in artificial intelligence, have seen their stocks decline over 30% from record highs in 2026. Investors appear to be overlooking their growth potential despite strong fundamentals.
Microsoft’s AI segment, powered by Copilot and Azure, reported a 123% year-over-year increase in annual recurring revenue to $37 billion. Azure’s cloud growth accelerated to 40%, driven by AI demand, while overall revenue rose 18% and earnings per share climbed 23% in the latest quarter.
Despite these gains, both stocks remain undervalued relative to their historical peaks, presenting a potential buying opportunity if market sentiment shifts in the second half of the year.