• Microsoft (MSFT) boasts dominant market share, strong cloud presence, and broad product offerings, supporting its $3.9 trillion valuation and continued growth prospects.
  • Technical indicators show a 100% “Buy” signal, with the stock trading above key moving averages and gaining 29.28% over the past year.
  • Wall Street and major analysts are overwhelmingly bullish, projecting double-digit revenue and earnings growth, with price targets as high as $675.
  • While momentum and sentiment are positive, Microsoft remains volatile, which means strict risk management and stop-loss strategies are essential.

Today’s Featured Stock

Valued at $3.89 trillion, Microsoft (MSFT) is one of the largest broad-based technology providers in the world. The company dominates the PC software market with more than 80% of the market share for operating systems, and its Microsoft 365 application suite is one of the most popular productivity software globally. 

Microsoft's products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools and video games. Through Azure, it offers cloud-based solutions that provide customers with software, services, platforms and content, and MSFT is now one of the two public cloud providers that can deliver a wide variety of infrastructure-as-a-service (IaaS) and platform-as-a-service (PAAS) solutions at scale. 

The company also designs and sells hardware, including PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories.

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. 

MSFT checks those boxes. Since the Trend Seeker signaled a buy on May 1, the stock has gained 23.20%.

MSFT Daily Chart with Trend Seeker

www.barchart.com

Barchart Technical Indicators for Microsoft

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Microsoft shares hit a new all-time high on July 31, touching $555.45 in intraday trading, and are presently just 5.64% below that high.

  • MSFT has a 100% technical “Buy” signal.
  • The stock recently traded at $533.60, above its 50-day moving average of $490.20.
  • Microsoft has a Weighted Alpha of +37.43.
  • The stock has gained 29.28% over the past year.
  • MSFT has its Trend Seeker “Buy” signal intact.
  • Microsoft is trading above its 20-, 50-, and 100-day moving averages.
  • The stock made 7 new highs and gained 5.89% in the last month.
  • Relative Strength Index (RSI) is at 73.64%.
  • There’s a technical support level around $518.

Don’t Forget the Fundamentals

  • $3.90 trillion market capitalization.
  • Trailing price-earnings ratio of 39.11x.
  • Revenue is projected to grow 14.02% this year and another 14.59% next year.
  • Earnings are estimated to increase 13.42% this year and an additional 16.88% next year.

Analyst and Investor Sentiment on Microsoft

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like Wall Street analysts are bullish on MSFT, and so are most major advisory sites.

  • The Wall Street analysts tracked by Barchart have issued 39 “Strong Buy,” 5 “Moderate Buy” and 2 "Hold" opinions on the stock, with a mean price target of $600.80.
  • Value Line gives the company its Highest rating with a price target of $637.
  • CFRA’s Market Scope rates the stock a “5 Star Buy” and a price target of $620.
  • Morningstar thinks the stock is 12% undervalued with a Fair Value of $600.
  • 1.27 million investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line on MSFT Stock

Microsoft currently has momentum and is hitting new highs. It has positive sentiment from Wall Street, plus analysts project double-digit increases in revenue and earnings.

That said, I caution that MSFT is volatile and even speculative in the current environment, which means investors should use strict risk management and stop-loss strategies.

Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.