Microsoft (MSFT) was Hurt by the “SaaSmaggedon” Market Reaction

Microsoft (MSFT) was Hurt by the “SaaSmaggedon” Market Reaction Soumya Eswaran Mon, May 25, 2026 at 5:47 PM GMT+2 3 min read ^GSPC MSFT Yachtman Asset Management released its first-quarter 2026 investor letter for its AMG “Yacktman Focused Fund”. A copy of the letter is available to download here .  The Fund returned 10.

37% for the first quarter, outperforming both the Russell 1000® Value Index and the S&P 500 Index, which returned 2. 10% and -4. 33%, respectively.

The U. S. markets continue to post new highs, with the S&P 500® having compounded at mid-twenties percent returns from 2023 to 2025.

The letter noted that there are no indications of a slowdown in the US market, despite significant geopolitical events. The Fund remains disciplined, investing in companies and building a portfolio of strong, risk-adjusted returns throughout the market cycle, emphasizing a long-term strategy for differentiated returns. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Yacktman Focused Fund highlighted Microsoft Corporation (NASDAQ: MSFT ). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On May 22, 2026, Microsoft Corporation (NASDAQ:MSFT) stock closed at $418.

57 per share. One-month return of Microsoft Corporation (NASDAQ:MSFT) was -1. 47%, and its shares lost 7.

02% over the past 52 weeks. Microsoft Corporation (NASDAQ:MSFT) has a market capitalization of $3. 11 trillion.

Yacktman Focused Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2026 investor letter: "Microsoft Corporation (NASDAQ:MSFT) was a detractor in the first quarter, but the investment remains a core holding in the portfolio. The “SaaSmaggedon” market reaction hit a broad array of software companies including Microsoft. While we agree that some software players’ products and business models may be significantly impacted by the capabilities demonstrated by Claude and other agentic models, we believe that Microsoft is well-positioned across cloud infrastructure, enterprise software, gaming, and its ownership of LinkedIn.

" Microsoft (MSFT) Stock: Truist Raises Price Target to $675, Reiterates Buy Microsoft Corporation (NASDAQ:MSFT) ranks second on our list of  40 Most Popular Stocks Among Hedge Funds . According to our database, 312 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter, the same as in the previous quarter.  While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.

If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . Story Continues In  another article , we covered Microsoft Corporation (NASDAQ:MSFT) and shared the list of best long-term stocks to buy for high returns. In addition, please check out our hedge fund investor letters Q1 2026  page for more investor letters from hedge funds and other leading investors.

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