Microsoft Stock Drop Looks Sharp, But How Deep Can It Go?
Microsoft (MSFT) stock is down 10.0% in a day. The recent slide reflects renewed concerns around slowing Azure cloud growth, rising AI costs, and OpenAI reliance, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Microsoft stands today.
- Size: Microsoft is a $3.2 Tril company with $305 Bil in revenue currently trading at $433.50.
- Fundamentals: Last 12 month revenue growth of 16.7% and operating margin of 46.7%.
- Liquidity: Has Debt to Equity ratio of 0.02 and Cash to Assets ratio of 0.13
- Valuation: Microsoft stock is currently trading at P/E multiple of 27.0 and P/EBIT multiple of 21.6
These metrics point to a Strong operational performance, alongside Very High valuation – making the stock Relatively Expensive. For details, see Buy or Sell MSFT Stock
That brings us to the key consideration for investors worried about this fall: how resilient is MSFT stock if markets turn south? This is where our downturn resilience framework comes in. Suppose MSFT stock falls another 20-30% to $303 – can investors comfortably hold on? Turns out, the stock has been more resilient than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- MSFT stock fell 37.6% from a high of $343.11 on 19 November 2021 to $214.25 on 3 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 June 2023
- Since then, the stock increased to a high of $542.07 on 28 October 2025 , and currently trades at $433.50
| MSFT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -37.6% | -25.4% |
| Time to Full Recovery | 224 days | 464 days |
2020 Covid Pandemic
- MSFT stock fell 28.2% from a high of $188.70 on 10 February 2020 to $135.42 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 June 2020
| MSFT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -28.2% | -33.9% |
| Time to Full Recovery | 85 days | 148 days |
2018 Correction
- MSFT stock fell 18.6% from a high of $115.61 on 1 October 2018 to $94.13 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 March 2019
| MSFT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -18.6% | -19.8% |
| Time to Full Recovery | 81 days | 120 days |
2008 Global Financial Crisis
- MSFT stock fell 59.1% from a high of $37.06 on 1 November 2007 to $15.15 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 6 November 2013
| MSFT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -59.1% | -56.8% |
| Time to Full Recovery | 1,703 days | 1,480 days |
Feeling jittery about MSFT stock? Consider portfolio approach.
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