“There’s some AI fatigue when it comes to companies like Microsoft, given the incredible run they’ve had,” said Neville Javeri, senior fund manager at Allspring Global Investments (SGX:B73
) . Investors “need to see additional proof points about demand for AI products and services for the rally to hold.”
Microsoft Corp. shares have lost their lustre in the past few months, with some investors cooling on the artificial intelligence (AI) trade and looking for better value elsewhere in the sector.
Shares in the software company dipped lower by less than 1% over the past six months, compared with an almost 10% gain for the Nasdaq 100 Index. With a drop of 0.6% on Tuesday, the stock is nearly 9% below its all-time high, while an exchange-traded fund that tracks software firms closed at a record on Monday. The underperformance has come as Microsoft reported mixed results in its latest quarter and as AI more generally loses steam as a driver of stock gains.
