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Microsoft shares have slumped 18% in 2026 amid investor fears over AI disruptions and growth uncertainties, as the broader tech sector faces volatile swings and shifting investor sentiment.
Small-cap stocks may outperform large-cap tech names like Microsoft in 2026 as Fed rate cuts boost broad economic growth, reducing AI-driven concentration risks in big tech companies.
Microsoft stock plunged nearly 3% after reports revealed cuts to AI sales targets, signaling weaker enterprise demand for AI products and challenging the previously high growth expectations.