Three major stocks hit 52-week lows on Thursday as investors reassessed the costs of AI infrastructure expansion. Microsoft saw its price target cut on margin concerns tied to heavy cloud and AI spending, while also facing European antitrust pressure. Palantir faced a seven-day sell-off amid questions about whether its premium valuation can hold as capital shifts toward hardware suppliers, and MicroStrategy declined sharply as Bitcoin exposure and financing risks weighed on the company.
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Microsoft hit a 52-week low of $349.20, Palantir fell to $106.38, and MicroStrategy dropped to $85 on Thursday. Stifel cut Microsoft's price target to $400 from $415, citing concerns that fiscal 2027 gross margin forecasts may be too optimistic as cloud and AI investment costs rise. Palantir extended a seven-session sell-off heading toward its worst week in over five years, while MicroStrategy's preferred stock fell below its $100 face value as Bitcoin dropped below $60,000.
Why it matters
Investors are shifting focus from long-term AI growth potential to the immediate costs of building the infrastructure needed to support it. For Microsoft, regulatory pressure in Europe—where EU antitrust officials issued a preliminary finding that Azure should be classified as a 'gatekeeper'—adds to profitability concerns. For Palantir, skepticism over premium valuations in enterprise AI software is mounting as investors favor chip and server suppliers over software providers with longer monetization timelines. MicroStrategy's steep decline reflects investor concern about whether the company can continue raising funds through preferred stock sales to buy Bitcoin.
What to watch
Microsoft faces rising cloud and AI investment costs that may compress margins in fiscal 2027. Palantir continues to trade at a forward earnings multiple of 120.6, significantly higher than many software peers. MicroStrategy's ability to fund future Bitcoin purchases depends on whether preferred stock can stay above its $100 face value as cryptocurrency prices fluctuate. Year-to-date, Microsoft is down 27%, Palantir down 39%, and MicroStrategy down 43%.
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