Microsoft shares have fallen for two straight sessions after Anthropic, the artificial intelligence company behind the Claude chatbot, launched a set of workplace tools that compete directly with Microsoft 365.

Anthropic unveiled Claude Sheets and Claude Whiteboards in beta on Tuesday, 10 November, and made its dashboard product, Claude Data, generally available. The three products map onto Excel, Whiteboard and Power BI in Microsoft's productivity suite, and the launch came on the first day of Anthropic's IPO roadshow.

Two days of selling

Microsoft's stock dropped 2.2% on Tuesday to $533.16, then fell a further 2.3% on Wednesday, according to CNBC figures cited in market coverage. The shares were trading at about $521 by Wednesday, and fell 0.4% to $518.94 in premarket trading on Thursday. The stock now sits more than 6% below its record close of $555.80 from 4 November. It steadied on Thursday, rising about 1.55% to $529.19 by late morning, according to the Motley Fool.

The timing is awkward for Microsoft. Anthropic is not a distant rival: Microsoft has committed up to $5 billion to the company and agreed to host it on Azure through 2033. Anthropic has committed to paying at least $47.2 billion in Azure compute rent between now and June 2033, roughly 7% of Microsoft's $677 billion commercial backlog, and Microsoft bought $1 billion of Anthropic shares in the IPO. Claude also operates within GitHub Copilot and Microsoft 365 Copilot under a collaboration announced in November 2025.

What is at stake for Microsoft

Microsoft 365 is a core profit engine. The business pulled in about $111 billion in revenue for the software giant's fiscal 2026, which ended on 30 June, and Microsoft 365's commercial and consumer businesses together brought in around a third of the $332 billion of revenue Microsoft reported for the year. Growth in paid Microsoft 365 commercial seats was 6% to 7% year over year in each quarter of fiscal 2026, slowing to 5% in the fiscal first quarter.

Analysts urged calm. Evercore said Claude Sheets cannot yet replace Excel, and the tools are still in beta, with Sheets and Whiteboards off by default for enterprise customers. The Motley Fool argued that a beta spreadsheet is not a reason to sell the stock, pointing to the entrenched habits of corporate users and earlier rivals that failed to dislodge Microsoft.

Brokers bet on a rebound at Ignite

Wall Street brokers are looking to Microsoft's Ignite conference, which runs from 17 to 20 November, for a recovery. Citi has a $680 price target and Morgan Stanley has $650, and both expect Ignite, with Azure and Copilot expected to take centre stage, to help the shares.

The fundamentals behind the stock remain strong. Revenue for the first quarter of fiscal 2027 was $92.3 billion, up 19% from the previous year, and the commercial backlog increased by 73% to $677 billion. Microsoft has pledged to invest $117 billion in AI and cloud infrastructure this year.

The episode captures the strange position Microsoft now occupies in the AI race: it is both Anthropic's largest backer and landlord, and the company whose most profitable franchise the start-up is now challenging.