Microsoft(NASDAQ: MSFT) it was a terrible investment in 2026. The stock is down 21% since the start of 2026, and has declined in a straight line since the start of 2026. On top of that, Microsoft shares are now down about 30% from their all-time high set last October. Microsoft has been disappointing for almost a year now, but is now the time to buy shares?
Microsoft shares hit a 52-week low a few days ago, but have since risen slightly. However, it appears poised to deliver incredible growth potential as it is a strong player in the artificial intelligence (AI) space and takes a balanced approach to major economic shifts.
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Microsoft is a big deal
Microsoft is approaching artificial intelligence from several different angles. First, the company is developing Copilot, its artificial intelligence tool that will help users of its other software products. It was a strong addition to Microsoft’s lineup, helping boost its annual AI revenue to $37 billion, up 123% year-over-year in the most recent quarter.
Another way Microsoft is thriving is through cloud revenue. Few companies have the computing resources to build and run artificial intelligence applications, so they rent them from cloud computing platforms such as Microsoft Azure. Azure hosts countless generative AI models, so users can choose which large language model (LLM) is right for them. Azure is growing rapidly, with revenue up 40% in the most recent quarter.
While Azure is technically neutral on what AI model is used, Microsoft would prefer its users to deploy ChatGPT, an OpenAI model. Microsoft is a major investor in OpenAI and is trading computing power for shares of OpenAI. This led to Microsoft acquiring a huge 27% stake in OpenAI. With OpenAI projected to go public at a valuation of $1 trillion or more, this investment appears to be paying off for Microsoft.
All three of these reasons are the main reasons to invest in Microsoft, but the company’s shares are trading at a very low price.
YCharts data.
With the company’s forward earnings at less than 20 times the five-year average of 30.2, Microsoft looks like a great deal, especially given S&P 500 Index trading at 21.7 times forward earnings. Microsoft is a fantastic stock pick that is being sold for no good reason. I wouldn’t be surprised if Microsoft’s stock soars sometime in July, especially since the company’s earnings are due later this month. This could be the catalyst needed to start its comeback, and now is the perfect time to buy it.
Should you buy Microsoft shares right now?
Before you buy Microsoft stock, consider this:
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Keithen Drury has positions at Microsoft. The Motley Fool holds a position at Microsoft and recommends it. The Motley Fool has a disclosure policy.
