Microsoft, one of the leading tech companies in the U.S., saw its stock price drop slightly following an unusual downgrade in its investment rating.
On Monday, Microsoft’s stock fell 0.40% to $433.51 during regular New York Stock Exchange trading and dipped an additional 0.20% in after-hours trading.
This decline followed investment firm D.A. Davidson’s decision to downgrade Microsoft’s rating from buy to neutral. Analyst Gil Luria expressed concerns about Microsoft’s heavy dependence on Nvidia, suggesting that while Microsoft initially led the AI boom, it is now facing stiff competition from companies like Amazon and Alphabet, Google’s parent company, which are rapidly advancing in the AI sector.
Luria noted that this heavy reliance on Nvidia has led to criticism from Microsoft’s shareholders, who believe that Microsoft is effectively transferring its wealth to Nvidia’s shareholders.