Microsoft (NASDAQ: MSFT) is roaring back. Since April began, the stock has jumped by more than 14% as of this writing. However, the tech leader is still down by over 20% since it hit its all-time high in October 2025. Could Microsoft maintain its recent momentum, or will ongoing developments — including inflation and geopolitical tension — drag the stock back down? It’s hard to predict what will happen in the next few months. But for investors focused on the long game, there are excellent reasons to think it’s still time to buy the dip. Here are three of them.
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One reason some investors are worried about Microsoft’s prospects is that they believe the company’s services will be replaced by artificial intelligence (AI). It’s not just Microsoft either. Many software stocks have been struggling for this very reason. However, how likely is it that AI will actually make Microsoft’s products obsolete? Once upon a time, some people feared the same would happen to Alphabet.
They thought AI chatbots would disrupt the company’s search empire, which it practically holds a monopoly over. Since Alphabet generates the lion’s share of its revenue from search-related advertising, that would have been a significant blow to the business.
Except, things didn’t unfold that way at all. Alphabet adapted, incorporated AI into its search capabilities, and, if anything, the technology improved the company’s business. Now, there are many differences between Microsoft and Alphabet. Just because the latter adapted doesn’t mean the former will, too. Even so, Microsoft has a deep culture of innovation and large, established relationships with enterprises.
Those two advantages can allow the company to get ahead of the threat posed by AI, update its services with that in mind, and maintain a solid share of its core markets. Microsoft has already started doing that. The company’s Copilot is an AI assistant integrated across its productivity suite. The tech giant will likely continue finding new ways to keep the AI threat at bay. In my view, it will be successful.
Investors worried about inflation or a potential recession should seriously consider Microsoft. It may be a tech stock that’s fairly volatile compared to many corporations in more defensive industries, but several aspects of its business should allow it to navigate economic downturns much better than many of its peers. Consider, for instance, that a significant portion of Microsoft’s revenue comes from subscriptions, including from individuals, businesses of all sizes, and even government or non-profit institutions.
