Microsoft’s $570 Billion Rout Sets Up Its Worst Month Since 2000

Microsoft has lost more than $570 billion in market value in June 2026, putting the software giant on track for its worst month since December 2000. Shares are down 17% for the month, the steepest monthly decline since the dot-com era, and the rout has dragged the company through a valuation discount Wall Street has not seen in a decade. The trigger is not a missed quarter. It is a bill that keeps getting bigger.

The selloff has already erased more than $570 billion in market value, per the $570 billion rout tallied this week, and pushed the stock to its lowest closing price since 2023 before a Friday rebound. Two weeks ago, Microsoft was one of the most valuable companies on earth. By Monday, it had become the headline of a different kind of story.

Microsoft Is Heading for Its Worst Month Since the Dot-Com Era

Microsoft has now lost 17% in June. The only worse month in the stock’s history was December 2000, when the company dropped 24.4% in the wreckage of the dot-com bust. The next-worst month on the modern record was February 2008, when Microsoft fell 16.56% in the run-up to the collapse of Lehman Brothers.

June 2026 now ranks third worst on that timeline. A modest rally in the final trading days could nudge the month back behind February 2008, but the print for the quarter is set: this is the kind of decline Microsoft has not seen outside of full-blown market crises.

Friday’s session offered a brief counterweight. A disclosure from Michael Burry that he had bought Microsoft call options expiring in 2028 helped send shares up 5.7% to $372.97, the stock’s best single day since May 2025. The bounce did not come close to undoing the month’s damage.

• 17% drop in June 2026, the steepest monthly loss since December 2000.
• $570 billion erased from Microsoft’s market value.
• December 2000 remains the worst month on record, at 24.4%.
• Friday’s 5.7% bounce to $372.97, the best single session since May 2025.

Why AI Is the Worry on Both Sides of the Trade

The irony at the center of the selloff is that the technology Microsoft is spending the most to build is also the technology investors now fear the most. AI powers both sides of the bear case. It is the cost driver in the capex line, and it is the competitive threat to the software franchise the company has run for decades.

Jack Ablin, chief investment strategist at Cresset Wealth Advisors, framed the squeeze in a single sentence.

Microsoft is getting hit on two sides with worries about both AI spending and AI disruption.

Ablin, whose firm still owns Microsoft, told Bloomberg the rotation felt less like a measured repositioning than a panic. Investors, he said, appear to be “shooting first and asking questions later.” The valuation is low. The conviction is not there.

The disruption worry is the older of the two. AI tools are getting good enough to write a memo, build a spreadsheet, or summarize a meeting, and that puts a long-running question over the future of Microsoft Office. “Whether Microsoft Word or Excel will be rendered obsolete by AI remains to be seen,” Ablin said. The spending concern, he added, is more immediate, especially since “so many are going to the bond market to borrow, suggesting their cash piles won’t be enough to sustain the buildout.”

The $190 Billion Question Hanging Over Microsoft

The number that defines Microsoft’s 2026 is a capital-expenditure plan of about $190 billion for the full calendar year. Microsoft disclosed the figure inside its late-April fiscal third-quarter results, the same print that Bloomberg flagged for showing weaker-than-expected Azure growth. Per Microsoft’s own Q3 FY26 earnings release, the company told investors it plans to spend roughly $190 billion on data centers, AI chips, and cloud infrastructure through the end of December.

Wall Street had expected about $154.6 billion. Microsoft came in roughly $35 billion above consensus, and the company itself attributed about $25 billion of the total to component price inflation across GPUs and memory rather than to additional capacity. The capex plan now sits in the same tier as Amazon’s roughly $200 billion for 2026, and well above Alphabet’s $175 billion to $185 billion range.

The cash-flow mechanics are starting to show. Q3 capital expenditures reached $30.9 billion, up 85% from the same quarter a year earlier. Free cash flow for the quarter compressed to $15.8 billion from $20.3 billion as the buildout outpaced operating-cash generation.

Microsoft Now Trades at Its Cheapest in a Decade

The selloff has done what big selloffs usually do to multiples. Microsoft now trades at about 19 times expected profits over the next 12 months, below the S&P 500’s 20 times and well under Microsoft’s own 10-year average of 27 times.

Microsoft is one of the largest weights in the S&P 500 and has traded at a premium to the index for most of the past decade. A discount to the S&P at any point in the modern era is unusual. A discount of that size, after a run that took the stock to record highs, is rare enough to count on one hand.

The rotation is concentrated rather than broad. State Street’s technology sector ETF (XLK) is up 27% year-to-date, ahead of the S&P 500’s 8% return. The Roundhill Magnificent Seven ETF (MAGS) has shed 10.7% over the past month and sits on a yearly loss of roughly 4%. The selling has hit the megacap AI-exposed names hardest, while the rest of tech has held up.

Burry’s 2028 Call Has Wall Street Reading the Tape Again

Michael Burry built his reputation on a single trade. The investor whose bet against the U.S. housing market before the 2008 financial crisis was the story of Michael Lewis’s The Big Short disclosed a long-dated Microsoft position in a Substack post late on Thursday, and the disclosure moved the stock the next morning.

Burry bought Microsoft call options with strike prices in the low $700s that expire in December 2028, according to Bloomberg, a wager that the stock will more than double from current levels over the next two and a half years. He has previously said on Substack that he sees $350 as a reasonable entry level for the shares, calling that zone a starting point for a multi-year AI-led recovery.

The market reacted in a hurry. Microsoft closed Friday at $372.97, up 5.7% on the day and the stock’s best single-session gain since May 2025. The Burry disclosure did not single-handedly produce the bounce. It landed on a tape that was already looking for a reason to rebound.

• Burry’s strike band: low $700s, December 2028 expiry.
• Friday close: $372.97.
• Friday’s gain: 5.7%, the best single day since May 2025.

What the Selloff Is Really Telling the AI Trade

Not every sell-side voice is joining the de-risking. Keith Fitz-Gerald, principal at the Fitz-Gerald Group, told Bloomberg that the current price “represents something close to an epic buying opportunity,” while noting that he is keeping his own position small until the AI question resolves. Deutsche Bank analysts led by Brad Zelnick maintained a Buy rating and a $550 price target, citing what they called incremental confidence in Microsoft’s ability to keep expanding operating margins and compounding growth. Bloomberg reports analysts forecast 17% sales growth in the current fiscal year, which would be the fastest annual pace since 2022.

The bull case for Microsoft is more than valuation. The company crossed Microsoft’s $37 billion AI run rate last quarter, up 123% year-over-year, and Q3 FY26 revenue rose 18% to $82.9 billion with Azure up 40% in constant currency. The bill is bigger than Wall Street expected. The revenue underneath it is growing faster than the bill.

The hard fact underneath both the bear and the bull case is the same: spending alone is no longer enough to satisfy the market. Investors want to see it converted into earnings, and Microsoft has not yet closed that loop on the timeline Wall Street is asking for.

• Analysts forecast 17% sales growth for the current fiscal year, the fastest pace since 2022.
• Q3 FY26 revenue rose 18% to $82.9 billion, with Azure up 40% in constant currency.
• AI annual revenue run rate surpassed $37 billion, up 123% year-over-year.
• Microsoft 365 Copilot paid seats exceeded 20 million.
• Commercial remaining performance obligations reached $627 billion, up 99% year-over-year.

Frequently Asked Questions

How much did Microsoft lose in market value in June 2026?

Microsoft’s market value fell by more than $570 billion in June 2026, according to Bloomberg data. The 17% monthly drop pushed shares to their lowest closing price since 2023 before a Friday rebound.

When was the last time Microsoft stock had a worse month than June 2026?

The last worse month was December 2000, when Microsoft fell 24.4% during the dot-com bust. February 2008 ranks next at a 16.56% drop. June 2026 at 17% edges past February 2008 for the second-worst month in more than 25 years.

How much is Microsoft spending on AI infrastructure in 2026?

Microsoft guided to roughly $190 billion in capital expenditures for the 2026 calendar year in its Q3 FY26 earnings release. Wall Street consensus had been about $154.6 billion, and Microsoft attributed roughly $25 billion of the plan to component price inflation rather than additional capacity.

Why did Michael Burry buy Microsoft call options in June 2026?

Burry disclosed in a Substack post that he bought Microsoft December 2028 call options with strike prices in the low $700s, a multi-year bullish bet that the stock will more than double from around $370 over the next two and a half years as AI-led growth compounds.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Stock market investments carry risk, and past performance does not guarantee future results. Readers should consult a qualified financial professional before making investment decisions. Figures cited are accurate as of publication.