Benzinga and Yahoo Finance LLC may earn commissions or revenue on some articles through the links below.
Actions of Microsoft Corp. They fell more than 20% in June, on track to record the steepest monthly drop since December 2000.
Twelve months ago, the Redmond, Washington-based company’s market capitalization was around $4 trillion. Today it amounts to 2.65 trillion dollars, behind Nvidia Corp., apple inc. and Alphabet Inc..
However, business is booming.
Revenue has grown 16% to 18% year over year for eight consecutive quarters. Profits have always exceeded Wall Street estimates and have also been increasing.
Don’t miss:
So why is the stock down more than 35% since the beginning of 2026?
The answer is one word: capital spending.
Why the market stopped caring about what Microsoft makes today
Capex (capital expenditure) is the money a company spends on physical infrastructure.
For Microsoft, that means data centers for artificial intelligence. That line of spending, not income, is what is now driving the stock.
Capital spending reached $38 billion last quarter. Bank of America estimates that Microsoft’s 2026 capital spending will approach $190 billion in 2026.
Trend: Avoid Investment Mistake Number One: How Your “Safe” Holdings Could Cost You Big
Microsoft is not alone. The five largest hyperscalers: Amazon.com Inc.Microsoft, Alphabet, Meta Platforms Inc. and oracle corp. – are expected to spend more than $700 billion in 2026.
The construction feeds back. More and more data centers are depleting their supply of chips and memory.
Prices go up. Spending is going up again.
The Chain That Makes Microsoft a Falling Stock
Rising capital spending means margins are under pressure, which means free cash flow declines. Microsoft’s capital spending increased 63% year over year. Free cash flow fell 10%.
Less free cash means fewer buybacks and smaller dividends, both things that reward shareholders.
Bank of America puts it clearly. Hyperscaler’s capital spending has increased from 70% of operating cash flow in 2025 to almost 100% in 2026.
Translation: there are almost no free dollars left for shareholders.
There is another side to trading. Since January, the semiconductor sector (as tracked by the iShares Semiconductor ETF – has increased by 94%. The Magnificent Seven, followed by the Roundhill Magnificent Seven ETFThey are down approximately 6%.
jeff bezos He once said, “Your margin is my chance.”
See also: Avoid Regrets: The Essential Retirement Tips Experts Wish Everyone Knew Sooner.
In 2026, that idea has taken on new meaning.
Every trillion that hyperscalers divert from their own margins flows to the companies that build the AI stack: memory, semiconductors, cooling systems, optical networks, batteries, power infrastructure, everything needed to build AI data centers and train increasingly powerful models.
The market no longer values Microsoft for what it earns today. He is considering the enormous cost of what he will have to build tomorrow.
Is Microsoft investing in the future or sacrificing the present to get there?
Right now, investors seem to believe it’s the latter.
Image: Shutterstock
Read next: Do you think you are saving enough for your children? You may be dangerously wrong: find out why
Generate wealth in more than just the market
Building a resilient portfolio means thinking beyond a single asset or market trend. Business cycles change, sectors rise and fall, and no investment performs well in all environments. That’s why many investors are looking to diversify with platforms that provide access to real estate, fixed income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it is easier to manage risk, capture consistent returns, and create long-term wealth that is not tied to the fortunes of a single company or industry.
Arrive
Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes from as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.
BluSky AI
The rapid adoption of artificial intelligence is creating significant demand for data centers, energy and IT infrastructure. BluSky AI is building modular AI data centers designed to support next-generation AI workloads while aiming to reduce deployment timelines compared to traditional facilities. For investors looking beyond AI software and applications, the company offers exposure to the infrastructure layer that makes artificial intelligence possible.
ark7
Residential real estate has historically provided investors with long-term income and appreciation potential, but direct ownership can be expensive and time-consuming. ARK7 allows investors to purchase fractional shares of rental properties, offering access to potential rental income and real estate exposure without property management responsibilities. By lowering the barrier to entry, the platform offers investors another way to diversify beyond traditional stocks and bonds.
Immersed
Immersed is building technology for the future of work through spatial computing. Known for its AR/VR productivity platform that allows users to work on multiple virtual screens, the company has grown to more than 1.5 million users worldwide. Immersed is also developing Visor, a lightweight headset designed specifically for professional productivity, positioning the company at the intersection of remote work, extended reality (XR), and next-generation computing.
Miso Robotics
Robotics and automation are becoming increasingly important tools for companies facing labor shortages and rising operating costs. Miso Robotics develops AI-powered kitchen technology that is already being deployed in restaurant environments, with products designed to help operators improve efficiency and streamline operations. As artificial intelligence expands beyond software and into real-world applications, the company is positioning itself at the intersection of robotics, automation and the future of foodservice.
Vinovest
Historically, fine wine and rare whiskey have moved independently of the stock market, making them a compelling alternative asset. Vinovest manages authenticated and insured investment grade wine and whiskey portfolios starting at $5,000. — sourcing, storage and insurance, all handled for you.
FarmTogether
Historically, farmland has maintained its value through market volatility and generated returns uncorrelated with stocks and bonds. For accredited investors, FarmTogether Offers Direct Access to High-Quality U.S. Farmland Starting at $15,000 — fully managed, no headaches for owners.
EquityMultiple
For accredited investors looking beyond stocks and bonds,EquityMultiple Provides Access to Vetted Commercial Real Estate Deals Starting at $5,000and only ~5% of opportunities pass their due diligence process.
fundraising
Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estateand credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.
Hartford American Gold
American Hartford Gold is a precious metals dealer that helps customers purchase physical gold and silver coins and bars, either for direct delivery or within self-directed precious metals IRA accounts.The company’s services include gold and silver IRAs, IRA renewals, and home bullion delivery, giving investors a way to use tangible metals to diversify portfolios and seek protection against inflation and market volatility.
Mobile Mode
Mode Mobile is changing the way people interact with their phones by allowing them to earn money from the same apps and activities they already use every day. Instead of the platforms keeping all the ad revenue, Mode Mobile shares a portion with users who interact with content, play games, and move around on their devices. Named one of Deloitte’s fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns daily smartphone use into a potential source of revenue.
