Here’s What Hit Microsoft (MSFT) in Q4

Market Overview - US equities showed strong momentum in 2025, achieving double-digit gains for the second consecutive year, with a rapid recovery from a bear market dip in April [1] - Market leadership has narrowed, with Mega-cap stocks and AI-driven companies dominating the landscape [1] Mar Vista U.S. Quality Strategy Performance - The Mar Vista U.S. Quality strategy reported a net-of-fees gain of +0.20% in Q4 2025, compared to the Russell 1000® Index's +2.41% and the S&P 500® Index's +2.65% [1] - Favorable stock selection in communication services, consumer discretionary, and financials contributed positively to performance, while information technology, materials, and healthcare detracted from it [1] Economic Outlook - In 2026, markets will need to balance strong fundamentals with increasing economic uncertainties [1] Microsoft Corporation Analysis - Microsoft Corporation (NASDAQ:MSFT) had a one-month return of -1.14% and a 52-week gain of 10.41%, closing at $470.67 per share on January 13, 2026, with a market capitalization of $3.499 trillion [2] - The stock faced pressure in Q4 2025 due to concerns over rising costs for AI data infrastructure, with capital expenditures expected to increase in 2026 [3] - Microsoft is well-positioned to fund its growth through a large base of operating cash flows, despite having meaningful exposure to OpenAI, which remains relatively unproven [3]