Microsoft Faces Stock Decline Amid Xbox Reset

Microsoft's stock price is currently down bad, but just how much have shares slid lately? A lot. So much so that June 2026 is expected to be Microsoft's worst month since December 2000 based on percent decline in a single month.

Microsoft is experiencing a significant drop in its stock price, with shares down about 20% in June, marking the worst performance since December 2000. This decline coincides with Xbox CEO Asha Sharma's implementation of a business 'reset,' potentially involving layoffs and studio closures. Despite Microsoft's revenue growth and exceeding Wall Street estimates, its stock is falling, possibly due to heavy spending on capital expenditures for AI infrastructure, limiting dividends and stock buybacks.

Xbox, facing documented struggles, is undergoing a reset expected to bring layoffs, studio closures, and game cancellations. Major changes are anticipated following Microsoft's fiscal year end on June 30, with CFO Amy Hood reportedly driving cost-saving measures at Xbox. The impact of these changes on Microsoft's stock remains uncertain, with potential severe human costs from closures and staff cuts.

With Xbox's profitability margins at only 3%, Microsoft's substantial investments in studios may not be yielding expected returns, especially with recent Game Pass price increases leading to membership cancellations. Speculation includes the possibility of spinning out Xbox from Microsoft, although the outcome is uncertain at this point.