Microsoft Set for Worst Quarter Since 2008 as AI Fears Converge
finance.yahoo.com
(Bloomberg) -- Microsoft Corp. is at the intersection of two troubling trends roiling the technology sector, which has the stock on track for its worst quarterly performance since the global financial crisis two decades ago.First, the software giant is doubling down on capital expenditures as Wall Street increasingly asks when investments in artificial intelligence infrastructure will produce more dramatic payoffs in revenue growth. And second, investors are selling software stocks over fears th
  • BlackLaZoR@lemmy.worldEnglish
    16·
    24 hours ago

    Why the fuck are they even in the Ai business in the first place? They were milking the cloud services for years, Xbox and Windows being just side hustles, and now they made trendy AI pivot for no reason. They trying to dig gold while business is in selling shovels

    • titanicx@lemmy.zipEnglish
      2·
      16 hours ago

      Everyone wants to be in the AI business. It’s what was expected to make money. It’s lost so much, I love it.

      • Scrollone@feddit.itEnglish
        1·
        15 hours ago

        Apple is the tail-ender in the AI race, but it’s paying off. Their latest macBook Neo is a success and it’s going to eat a lot of Microslop’s market.

    • mlg@lemmy.worldEnglish
      5·
      24 hours ago

      MSFT’s entire method of operation revolves around acquisition.

      They bought into OpenAI just like they did for all of their major products in hopes that it makes money.

    • T156@lemmy.worldEnglish
      1·
      18 hours ago

      If they had done a Google and sold GPU-compute cloud services, they could probably have made quite a tidy sum. Everyone wants compute.

  • disorderly@lemmy.worldEnglish
    511·
    1 day ago

    GitHub is teetering on one 9 over an entire quarter. There are serious, systemic problems in Microsoft’s shop.

    • Lydon_Feen@lemmy.worldEnglish
      52·
      1 day ago

      Or maybe injecting even more AI into their products? People seem to looooove that.

      Or maybe making an even shittier OS by firing more engineers, and replace them with terrible AI slop code?

      • Otter@lemmy.caEnglish
        3·
        20 hours ago

        The more they do all of the above, the more incentive that companies will have to support Linux desktop

  • jtrek@startrek.websiteEnglish
    43·
    1 day ago

    Maybe they could focus on delivering quality products that customers want, instead of investing all their time and effort into expensive AI widgets people don’t.

  • jubilationtcornpone@sh.itjust.worksEnglish
    30·
    1 day ago

    This drawdown has sparked a debate about the “Magnificent Seven” member: Is Microsoft stock a falling knife, or has the market overreacted, presenting a rare opportunity to buy a preeminent artificial intelligence (AI) stock at a discount?

    First, “the market” overreacts about everything. Not surprising given that stock price volitility is mostly driven by speculation.

    Second, who writes this crap? Anyone who thinks of Microsoft as an “AI stock” is clueless. The majority of Microsoft’s revenue comes from “services”, a big chunk of which is derived from subscriptions for Azure, Office 365, and other hosted solutions.

    Microsoft has been racing to cram “AI” into as many areas as possible. Probably in an attempt to justify their substantial R&D and capital expenditures. But calling them an “AI stock” is insane considering “AI” is not their core business or even a profitable part of their business.

    • PieMePlenty@lemmy.worldEnglish
      1·
      15 hours ago

      But calling them an “AI stock” is insane considering “AI” is not their core business or even a profitable part of their business.

      I suspect it is because MSFT is overvalued at the moment and the overvalued part is AI hype. Now that the AI bubble is decreasing, we see it reflected in MSFT. They’re not pure AI stock, but some part of it is, so I think the speculation is apt. So, if you’re an AI bro and a bit of a pussy and not 100% behind it, you can back Microsoft since they have other income streams to fall onto. If you’re hardcore, you buy OpenAI and lose everything when it goes down.

    • porcoesphino@mander.xyzEnglish
      2·
      1 day ago

      Isn’t a decent amount of trading vibes / meme based? At least, a lot of crypto and arguably Tesla is. For those traders, isn’t Microsoft an AI stock? At least some of the genAI stock valuations are from a subset of people thinking that the singularity is coming and that the first of these companies to do it will boom, aren’t they? And isn’t that the target audience for this sort of reporting?

      • ParlimentOfDoom@piefed.zipEnglish
        2·
        18 hours ago

        Except Microsoft has been considered behind the other AI stocks for the last couple years. So they have not been seeing quite as big a boon as the others.

    • jtrek@startrek.websiteEnglish
      5·
      24 hours ago

      My hot take has always been that Xbox was a stupid project. They had windows. People play video games on windows. They should have made steam and something like steam machines 25 years ago.

      • BlackLaZoR@lemmy.worldEnglish
        6·
        24 hours ago

        It really well promoted their DirectX API locking everyone into it. That was major part why there was no alternative to windows. But this isn’t the case anymore, since super fast translation was invented by single linux guy with Anime waifu in his avatar.