Microsoft is currently facing two unfavorable trends that threaten to result in its poorest quarterly performance since the 2008 financial crisis. On one front, the company has ramped up its capital investments, despite skepticism from Wall Street regarding the return on investment in artificial intelligence (AI). On the other front, investors are offloading software stocks, driven by fears that products from AI startups may supplant Microsoft's existing offerings. In the first quarter alone, Microsoft's stock price plummeted by 24%, marking the poorest performance among this year's 'Magnificent Seven' tech stocks. This sell-off has left Microsoft's stock price relatively depressed, with its price-to-earnings ratio tumbling to the lowest level since June 2016. The company's valuation multiple now barely exceeds that of the S&P 500 index and, for the first time since 2015, even traded at a discount.