Microsoft is the worst-performing Mag7 stock year to date, and retail traders see little hope of a near-term rebound.
- MSFT is down 24% year-to-date through June 24.
- Stocktwits sentiment for MSFT flipped to ‘bearish’ from ‘bullish’ early Thursday.
- Still, analysts overwhelmingly recommend buying shares at current levels.
Microsoft Corp. stock was among the most-discussed names on Stocktwits early Thursday, with traders highlighting its recent underperformance even as momentum continues to build across semiconductor stocks.
With the stock down more than 24% year to date, Microsoft is on track for its worst first-half performance since 2000 – a stark reversal from the strong gains of recent years, fueled by its early partnership with OpenAI and the integration of AI across its cloud and software businesses.
The Windows developer trades at 20.2 times its forward earnings, its lowest PE ratio since late 2016, according to Koyfin data.
Microsoft is the worst-performing stock in the “Magnificent Seven” group of equities, and traders believe there is little likelihood of a near-term rebound. On Stocktwits, retail sentiment for MSFT flipped to ‘bearish’ from ‘bullish’ the previous day.
“$MSFT so let me get this straight, memory chips keep on rallying and making new highs while their customer hyperscalers keep making new lows, makes perfect sense,” said a trader.
Another wrote: “$AMZN $NVDA $NVDA $META $MSFT $GOOGL So glad I bought Micron. MAG7 holders are all brain dead giving all their cash to us at 86% margin. Pure profit! Get brutally mugged by memory, Mag7 bagholders!”
Micron reported blowout quarterly results on Wednesday, driving shares of the company and other semiconductor firms sharply higher.
The performance of Microsoft and other Big Tech giants sharply contrasts with that of semiconductor stocks, even though all are key players in the AI trade. Chip stocks such as Intel, Micron and Western Digital have risen nearly four times in the first six months of the year.
Microsoft has faced pressure amid a broader selloff in software stocks and rising competition. Alphabet’s Google Gemini advances have helped lift GOOGL shares, while Anthropic continues to rapidly expand its AI offerings.
To bolster its position, Microsoft has reportedly explored restructuring its Xbox business and is considering integrating China’s low-cost DeepSeek models into its Copilot platform, among other moves.
Still, analysts are overwhelmingly upbeat about the Windows maker. Currently, 53 out of 56 analysts have a ‘Buy’ or higher rating on the stock, and the remaining three rate it ‘Hold,’ per Koyfin. Their average price target of $561.39 implies a 53% upside from the stock’s closing price on Monday.
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