Microsoft stock is down today mainly because it’s having a broad pullback after a very strong run, in the context of elevated expectations and some AI- and valuation-related worries. Short-term moves like today’s are mostly about sentiment, not a sudden change in Microsoft’s business fundamentals.

What is happening today

Microsoft is trading around 478–479 USD, off roughly 2–3% from the prior close, on higher-than-average volume. The stock is also below its recent 50‑day moving average, which traders often read as a sign of short‑term weakness or a possible correction phase.

Main reasons for the drop

Recent commentary notes that large‑cap tech, including Microsoft, has been under pressure as investors question rich valuations after a long AI-driven rally. There have also been reports that AI revenue ramp and enterprise adoption are slower than the most optimistic expectations, which cools some of the earlier enthusiasm.

Higher interest rates and periodic rotations out of mega‑cap tech into other sectors have added to selling pressure on days like this. On top of that, insider selling by senior executives earlier in the fall has made some traders more sensitive to downside moves, even if those sales were pre‑planned.

Does it mean something is wrong?

Analysts still rate Microsoft as a “buy” on average, with targets well above the current price and continued expectations for double‑digit revenue and earnings growth, especially from cloud and AI. Recent earnings beat Wall Street estimates and the company even raised its dividend, which suggests management’s confidence in cash flow and long‑term prospects.

For long‑term holders, moves of 2–3% in a single day are common for a large tech stock and usually reflect shifting sentiment rather than a structural problem. The key drivers to watch going forward are Azure/cloud growth, monetization of AI products like Copilot, and any big macro shifts that affect tech valuations.