Microsoft's stock has experienced a significant decline of 34% from its 52-week high, currently trading around $414. Despite this recent performance, the company's fundamental growth, particularly in Azure and AI services, remains strong, with analysts maintaining a consensus "Strong Buy" rating and a high target price of $675. The market is focusing on short-term results, creating a disconnect with Microsoft's long-term AI strategy and potential. While AI investments are substantial and growth is significant, the market is pricing in potential execution challenges and the timing of long-term AI demand realization. The current valuation, with a forward P/E of 25.87x and Price-to-Sales of 11.16x, is considered fair given the company's market dominance and AI potential, but investors are growing impatient for faster tangible returns from AI initiatives.