As 2026 unfolds, “The Magnificent Seven” finds itself in a bit of a predicament. Membership numbers dropped significantly in the early part of the year, prompting doubts among investors regarding the value of their investments tied to promises of growth, particularly in artificial intelligence (AI). Despite this, many of the companies in the group have since recovered. Currently, seven firms are performing well in the market, with the S&P 500 rising over 8% and Alphabet enjoying a growth of more than 20% since the start of the year.
Yet, one company is lagging behind. Microsoft (NASDAQ: MSFT) has seen a decline of roughly 13% in 2026, making it the worst performer in the group. Earlier this year, Tesla was in a similar spot, but it has since climbed out of last place alongside other chip manufacturers. Meanwhile, Nvidia and Apple—the iPhone maker—are coming off robust financial quarters.
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The strange thing about Microsoft’s drop is that the company itself doesn’t seem to be in turmoil. So, is the stock still worth considering?
Business maintains momentum
In the third quarter of 2026, which wrapped up on March 31, Microsoft showcased 18% revenue growth compared to last year, totaling $82.9 billion. This is slightly up from 17% growth in the previous quarter, while operating income surged by 20% to $38.4 billion. Notably, the company’s non-GAAP earnings per share increased by about 21%.
Furthermore, Microsoft has reported that its annual revenue from AI products has surpassed $37 billion, reflecting a staggering year-over-year growth of 123%. This impressive figure encompasses everything from external developers utilizing Azure, Microsoft’s cloud service, to its own Copilot assistant, which has gained over 20 million paid users after adding 5 million in just the first quarter.
The company’s leadership also hinted at a shift in pricing structure.
“All of our per-user businesses, whether it’s productivity, coding, or security, are transitioning to per-user and usage-based models,” said CEO Satya Nadella during a call about the company’s third-quarter earnings. Essentially, Microsoft plans to continue charging its established per-seat fees while also implementing fees based on actual usage of its AI tools. This new pricing model has already begun with the GitHub Coding Assistant.
It’s also worth noting that Microsoft holds about 27% of OpenAI and has a non-exclusive license for its technology until 2032.
Is it time to buy Microsoft stock?
Before purchasing Microsoft stock, you might want to consider a few factors:
Our analysts have identified 10 promising stocks to consider that do not include Microsoft. These stocks show potential for significant returns in the coming years.
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Daniel Sparks has connections with individuals positioned at Apple and Tesla. The Motley Fool advises positions in Alphabet, Apple, Microsoft, Nvidia, and Tesla.
This “Magnificent Seven” stock is the worst performer of 2026. Is it time to buy it? Originally published by The Motley Fool
