Outperforming 99% of rivals, an investment fund bought Microsoft stock during the collapse

French fund Sycomore Sustainable Tech, which outperforms 99% of its peers, took advantage of the collapse of Microsoft shares on January 29 to buy them, Bloomberg reported. The company's capitalization that day collapsed by $357 billion: the securities lost 10% of their value after the report. Investors are looking too closely at Microsoft's short-term problems, some analysts say.

"We remain confident that the [Microsoft] group is likely to be the leader in artificial intelligence, especially with its Copilot product," Sycomore portfolio manager David Rainville told Bloomberg.

Bloomberg did not specify how many shares of Microsoft bought Sycomore Sustainable Tech and for what amount. The fund's portfolio consists of shares of global tech companies worth €514 million, the agency says. As of December 2025, the fund's largest investment was Nvidia (9.1% of the portfolio), with Microsoft ranking fourth (5.8%).

Rainville recognized the difficult equity market situation for software developer stocks due to some investors' concerns about the code that artificial intelligence writes, Bloomberg reports. The Sycomore portfolio manager admitted that the fund could suffer losses in the near term because of this. But regarding Microsoft, he is confident that the company "has the resources and intellectual property over the long term to become a leader in application and infrastructure software in the AI world," the agency added.

"Investors tend to underestimate the fact that Microsoft owns not only a significant stake in [ChatGPT developer] OpenAI, but also the rights to much of OpenAI's intellectual property," Rainville added.

He also pointed out that the current valuation of the company's shares is becoming more and more attractive. The ratio of securities value to projected earnings (P/E ratio) is now about 24, while the five-year average is 29, Bloomberg noted.

Analysts are divided on what investors should do after Microsoft's stock collapsed on Jan. 29, the strongest since 2020, MarketWatch writes.

Mizuho analyst Jordan Klein thinks the stock looks like "dead money" until Microsoft can lift revenue growth for its Azure cloud service above 40%. It slowed to 39% in the December quarter. Microsoft executives have said growth would have been higher if the company had devoted more of its limited resources to Azure to meet strong demand for cloud services from third-party developers. But instead, the company is deliberately choosing to allocate some of its GPUs to internal teams, MarketWatch reports.

"These efforts bring much greater long-term benefits and margin growth potential to the company and investors," Klein wrote in a MarketWatch statement. - But until they have enough GPUs to meet both internal and external demand for AI, Azure's growth is likely to remain at this level, and investors will want more. That's why the stock is suffering."

On the other hand, Bernstein 's Mark Merdler believes Microsoft has its priorities straight. Investors should realize that "Microsoft's management made a conscious decision to focus on what's best for the company in the long term, rather than stock price growth this quarter," Merdler said (quoted in MarketWatch).

Deutsche Bank analyst Brad Zelnick said investors are focusing too much on short-term issues, "overlooking a history of exceptional shareholder value growth and efficient operations," Marketwatch reported. Zelnick noted that Microsoft is on track to grow operating profit and adjusted earnings at 15% for the third consecutive year. According to the analyst, this strategy "puts the onus on Microsoft to deliver results before it is recognized."

In trading on Friday, January 30, Microsoft securities fell another 0.74% to $430.29. This is the lowest closing price since Ma 1, 2025. The company's shares are now down 11% compared to the beginning of 2026.

Most analysts so far advise buying Microsoft shares: they have a combined 61 Buy and Overweight ratings versus only three Hold (a recommendation to hold), MarketWatch shows.

The threat of artificial intelligence to software developers was reflected in the shares of game studios on Friday. The emergence of Google's Genie 3 AI model, which is capable of creating digital reality at the user's request, brought down the shares of Take-Two Interactive, the studio that created GTA, as well as the papers of game engine developers.

This article was AI-translated and verified by a human editor