Microsoft Corporation (MSFT.US) fell 23% in Q1, marking its worst quarter performance since the 2008 financial crisis.

With the intensification of artificial intelligence competition and the overlapping pressure of the macro environment, Microsoft Corporation (MSFT.US) stock price has been significantly under pressure, recording its worst quarter performance since the 2008 financial crisis, sparking widespread discussions in the market about its AI strategic prospects. Data shows that Microsoft Corporation's stock price fell by 23% in the first quarter of this year, a decline that significantly exceeded its major tech peers. However, driven by an overall market rebound on Tuesday, Microsoft Corporation's stock price rebounded by 3.12%, marking its largest single-day increase since July of last year. Analysts point out that Microsoft Corporation is currently facing "dual pressures": on one hand, it needs to continue to expand its AI infrastructure investments to support rapidly growing demand, while on the other hand, it needs to achieve commercialization of AI products. The conflict in the Middle East has pushed up oil prices, also to some extent raising data center construction and operation costs, further squeezing profit margins. On the product front, Microsoft Corporation's AI assistant Copilot has performed below expectations. Faced with competitors like Alphabet Inc. Class C (GOOG.US, GOOGL.US), OpenAI, and Anthropic, Copilot's user growth has been relatively slow, with only about 3% of enterprise Office users currently purchasing the product license. In response to this situation, Microsoft Corporation recently made adjustments to its AI team, having Mustafa Suleyman, who was originally responsible for Copilot consumer business, shift to model development, and bringing in a new leader to oversee product experience. This adjustment has led to different interpretations in the market, with some views considering it as strategic optimization, while others believe it reflects the business progressing slower than expected. Meanwhile, the entire software industry has also been impacted by the AI impact. Several software stocks, including Adobe (ADBE.US), Atlassian (TEAM.US), and ServiceNow (NOW.US), have experienced declines of over 30% so far this year. However, some analysts hold a relatively optimistic view on Microsoft Corporation. DA Davidson analysts believe that there is a clear deviation between the company's fundamentals and stock price performance. The company's latest quarter revenue growth is close to 17%, accelerating from the previous year. Its core products Windows and Office still have very strong user stickiness. In terms of cloud business, Microsoft Corporation continues to maintain strong growth. Its Azure cloud services saw revenue growth of 39% in the most recent quarter, and the backlog orders doubled year-on-year to $62.5 billion, primarily benefiting from the cooperation with AI companies such as OpenAI and Anthropic. Despite this, the competitive landscape is changing. The exclusive partnership in cloud infrastructure between Microsoft Corporation and OpenAI is no longer, and the two are gradually turning towards competition in some areas, which also brings uncertainty for future growth. Microsoft Corporation CEO Nadella stated that the competition in the AI field is fierce, but not a zero-sum game, and the company still has the ability to maintain a leading position in the competition.