TLDRs;
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Microsoft stock plunges amid AI doubts as investors grow concerned about the projects’ potential returns.
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Big technology companies have experienced massive losses in market value during the first months of 2026.
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TSMC, Samsung, and Walmart gain significant market value as AI infrastructure investment continues to rise.
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Most companies report no measurable profits from generative AI, highlighting challenges in enterprise adoption this year.
Microsoft (MSFT) has experienced a sharp decline in 2026, with its market capitalization dropping approximately 17%, equating to a loss of around US$613 billion.
The steep fall reflects growing investor concerns about the profitability of AI investments and competition from emerging rivals such as Google’s Gemini and Anthropic’s Claude. Analysts note that while Microsoft continues to invest heavily in AI, the short-term returns remain uncertain, prompting caution among shareholders.
This downward trend is not isolated. Amazon (AMZN) has seen its shares tumble 13.85%, translating to a US$343 billion market value reduction. Forecasts of over a 50% increase in capital expenditure this year have heightened concerns over immediate returns. Nvidia (NVDA), Apple (AAPL), and Alphabet (GOOGL) have also suffered market value contractions of US$90 billion, US$256 billion, and US$88 billion, respectively.
AI Spending Faces a Reality Check
The AI sector, which has attracted massive investments, is now under scrutiny. Worldwide data center capital expenditures could hit US$1.7 trillion by 2030, driven by hyperscalers, neo-cloud providers, and government-backed AI initiatives.
However, enterprise adoption has yet to yield measurable profits. A report cited by The Financial Brand highlights MIT research indicating that 95% of companies report zero tangible returns from generative AI systems.
The report suggests that many AI deployments fail to retain memory or context, limiting applications to basic tasks. This mismatch between investment and payoff has caused a reassessment of AI strategies, particularly by investors seeking short-term earnings visibility.
Shift in Market Sentiment
Investor focus is increasingly moving from long-term AI ambitions to immediate financial performance. While AI software firms face skepticism, companies involved in building the underlying physical infrastructure are seeing gains. TSMC and Samsung Electronics have added US$294 billion and US$273 billion in market value, respectively, while Walmart’s value increased by US$179 billion.
IoT Analytics explains this shift is driven by the surge in demand for servers and power systems. Modern AI server racks consume more than 100 kW, requiring advanced cooling and electrical systems. Companies like Foxconn and Schneider Electric are benefiting directly from this infrastructure boom, highlighting a divergence between software-led AI ventures and hardware-focused firms.
The Industrial AI Opportunity
Despite the current caution, the AI buildout continues to reshape industrial priorities. NVIDIA plays a key role in influencing data center layouts, power allocation, and cooling requirements across the supply chain. This positioning ensures that firms specializing in AI hardware and infrastructure capture much of the immediate economic benefit, even as software-focused giants like Microsoft face investor scrutiny.
Market watchers caution that while Microsoft’s slide reflects short-term concerns, the long-term AI potential remains significant. The current correction may offer a strategic opportunity for investors willing to weather volatility while the industry matures.
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