Down 25% From Highs, Is Microsoft Stock Now a Steal Before Q2 Earnings?

The tech earnings season has begun, and Microsoft (MSFT) is set to report its second quarter of fiscal 2026 earnings on April 29. There was a time when owning MSFT stock happened without a shadow of a doubt. As a legacy tech player backed by a strong balance sheet, recurring revenue, and consistent earnings growth, MSFT was believed to be a “buy-and-forget” stock. But today, investors are questioning whether AI-driven tech stocks are overvalued and rotating out of them to more defensive sectors.

Like most tech stocks this year, Microsoft's stock hasn’t been immune to the shift in the market sentiment. The stock is down 14% year-to-date (YTD), compared to the tech-heavy Nasdaq Composite ($NASX) gain of 6%, but its fundamentals remain rock solid. Led by artificial intelligence (AI), its cloud business continues to scale at an impressive pace, and the tech titan shows no sign of slowing.