MSFT Stock Price Drop Analysis (Nov 2025)

On November 18, 2025, Google launched its Gemini 3 AI model, which quickly gained traction for outperforming OpenAI’s ChatGPT. Key industry figures like Salesforce CEO Marc Benioff publicly switched from ChatGPT to Gemini 3, citing superior capabilities [0]. This event coincided with a 10.3% drop in Microsoft (MSFT) stock price over the subsequent week, while Google (GOOGL) stock rose 22.14% over the same period [1][2]. Reddit users highlighted three main drivers for MSFT’s decline: Google’s outperformance of OpenAI (MSFT owns 27.5% of OpenAI), normal market rotation, and concerns over MSFT’s valuation [Event Content].

MSFT’s stock underperformed the broader Technology sector (which was up 0.78% during the period) due to investor sentiment shifting toward Google’s AI leadership [4]. The direct competition between Gemini 3 and ChatGPT (backed by MSFT) led to a reallocation of capital from MSFT to GOOGL [0][2].

The Gemini 3 launch has reignited concerns about OpenAI’s competitive position in the AI market. If Gemini 3 continues to gain market share, MSFT’s AI monetization efforts (e.g., Copilot) could face headwinds, as businesses may prefer Google’s AI tools over OpenAI-powered solutions [0][1].

Investor sentiment toward MSFT has turned cautious, with the stock dropping below its 20-day moving average ($502.34 vs. current $476.99) [1]. In contrast, GOOGL’s stock has surged past its 20-day moving average ($288.14 vs. current $323.44) [2], indicating strong bullish sentiment.

Sources: [1][2][4]

• Directly Impacted
  : MSFT (AI competition risk), GOOGL (AI leadership gain).
• Indirectly Impacted
  : OpenAI (MSFT’s 27.5% stake), AI-related tech stocks (e.g., NVDA, which supplies chips to both companies).
• Sectors
  : Technology (MSFT’s underperformance), Communication Services (GOOGL’s outperformance).

• Financial Valuation
  : Unable to verify MSFT’s current P/E ratio (claimed to be 40x vs. historical 28-34x) due to tool access limitations [3].
• AI Revenue Data
  : Lack of recent Copilot revenue figures to assess MSFT’s AI monetization progress.
• OpenAI’s Response
  : No public details on OpenAI’s next model launch to counter Gemini3.

• AI Competition
  : Google’s Gemini3 may erode OpenAI’s market share, impacting MSFT’s 27.5% stake value [0][1].
• Valuation Risk
  : If MSFT’s P/E ratio is indeed 40x (as claimed), it may be overvalued relative to historical averages.
• Sentiment Volatility
  : Short-term stock movements are driven by AI narrative shifts, which can reverse quickly if OpenAI releases a competitive model.

1. OpenAI’s Next Model
   : Launch date and capabilities to counter Gemini3.
2. Copilot Adoption
   : MSFT’s quarterly Copilot user growth and revenue numbers.
3. Gemini3 Market Share
   : Trends in user adoption and enterprise partnerships.
4. MSFT’s Valuation
   : Upcoming earnings reports to confirm P/E ratio and growth metrics.

[0] Web Search Results: CNBC, Business Insider, Mashable (Nov 2025).
[1] MSFT Stock Daily Prices (Oct27-Nov25): get_stock_daily_prices tool.
[2] GOOGL Stock Daily Prices (Oct27-Nov25): get_stock_daily_prices tool.
[3] Financial Indicators Error: get_financial_indicators tool (IP limit exceeded).
[4] Sector Performance: get_sector_performance tool (Nov26,2025).
[Event Content] Reddit Discussion (Nov26,2025): User queries on MSFT’s stock drop.