Microsoft underperforms the S&P 500 by 31 percentage points year-to-date amid OpenAI rivalry and hardware limitations.
Microsoft’s stock has declined 24% in 2024, underperforming the S&P 500’s 7% gain. The 31-point gap reflects growing concerns over its AI strategy and competitive positioning.
Over the past five years, Microsoft shares rose 38%, trailing the S&P 500’s 72% gain and Alphabet’s 171% surge. The shift follows OpenAI’s transition from ally to competitor, eroding Microsoft’s advantage in Azure cloud and Copilot AI products.
Analysts highlight Microsoft’s lack of a hardware ecosystem compared to Apple’s 2 billion devices, limiting its AI deployment capabilities. Legacy reliance on Windows and Office further constrains growth prospects.