Microsoft stock drops 18% due to trade concerns, but long-term AI potential makes it attractive

From Nasdaq: 2025-04-20 04:57:00

President Donald Trump’s announcement of new tariffs on imported goods has triggered fears of a global trade war and economic slowdown, leading to a 14% drop in the S&P 500 and an 18% drop in the Nasdaq-100. Investors are seeking safe-haven assets like cash amidst the uncertainty.

Microsoft’s stock has dropped 18%, presenting a buying opportunity for investors. With a strong track record and a focus on emerging technologies like artificial intelligence (AI), Microsoft’s upcoming financial results could spark a recovery. The company’s AI virtual assistant, Copilot, is gaining traction and could drive long-term revenue growth.

The Azure cloud platform is central to Microsoft’s AI strategy, with Azure AI revenue soaring 157% year over year. Azure provides businesses with computing capacity and ready-made AI models, positioning it for significant growth. Wall Street is closely watching Microsoft’s capital expenditures and trade impacts, which could influence Azure AI’s future growth.

Investors considering Microsoft stock should note the recent 18% dip and a price-to-earnings ratio discount. Despite short-term market fluctuations, Microsoft’s long-term potential in AI and digital services remains strong. The company’s resilience to trade tensions and projected AI industry growth make it an attractive investment option.

The Motley Fool’s Stock Advisor team has identified 10 top stocks to buy now, excluding Microsoft. The selected stocks have the potential for substantial returns over the coming years. Stock Advisor’s impressive average return of 792% surpasses the S&P 500’s average return of 153%, making their recommendations worth considering for investors.

Before investing in Microsoft or any other stock, it’s crucial to conduct thorough research and consider expert recommendations. The rapidly evolving market landscape requires informed decision-making to maximize investment returns. Stay updated on industry trends and expert insights to make well-informed investment choices.



Read more at Nasdaq: Down 18%, Is Microsoft Stock a Buy on the Dip Before April 30?