Microsoft is the worst Dow Jones stock Thursday as the tech giant's soft outlook offsets an earnings beat. Here's what you need to know.

It's worth noting that Microsoft isn't a cheap stock. Even after this move, Microsoft trades for about 30.5 times forward earnings estimates. Given the company's operating income growth of 17% year over year, this seems like a reasonable, but not dirt cheap, valuation.

Microsoft is set to report fiscal second-quarter earnings after the market closes Wednesday, with analysts largely bullish despite what Morgan Stanley called a growing “wall of worry."

We continue to believe that Microsoft remains uniquely positioned to monetize the vast new AI opportunity across applications,” writes BofA Securities analyst Brad Sills.