The winds may be starting to blow in the favor of struggling Microsoft (MSFT) bulls.
What the chart is saying about Microsoft: Evercore ISI chief technical analyst Rich Ross said in a new note that Microsoft has one of the “best acting charts” in the tech space right now, noting that the stock has reclaimed its 50-day moving average with “authority.”
He added that Microsoft can be “owned both fundamentally and technically,” given the recent pullback to a long-term support level (see chart below) that has held since the European financial crisis.
Microsoft sat out the “Magnificent Seven” rally: Microsoft stock has dropped 10% this year, as its fourth quarter results underwhelmed and worries about AI investment surfaced. It has been an entirely different story for most other members of the Mag 7 this year.
Nvidia (NVDA) continues to lead the pack, up roughly 12% year to date as of late April. The gains have been fueled by the launch of its Vera Rubin AI platform and CEO Jensen Huang’s projection of bullish AI demand for the foreseeable future.
Amazon (AMZN) has also seen strong momentum, climbing 13% on the back of fresh investments into Anthropic (ANTH.PVT) and cost-cutting moves.
Alphabet (GOOG, GOOGL) stock reached an all-time high in February before retracing slightly — it’s still up 12% this year.
Meta (META) has staged a dramatic 25% rebound in April after nearly hitting a 52-week low in March, driven by the release of its groundbreaking Muse Spark AI model and the deescalation of conflict in the Middle East. The stock is up 3% this year.
Tesla (TSLA) stock has tanked 15% this year as first quarter results sparked worries about aggressive AI spending.
Apple (AAPL) stock is down slightly, pressured recently by news of Tim Cook stepping aside as CEO for John Ternus.
Bottom line: Microsoft stock hasn’t gotten a lot of love this year, clearly. But with the technical setup improving and concerns about the pace of Azure growth and capital expenditure plans well known, a positive shift in sentiment could emerge.
Wedbush tech analyst Dan Ives said, “The Street continues to underestimate the Azure growth story in our view with an AI driven shift about taking place in Redmond heading into the back half of the fiscal year, making Microsoft one of our favorite large cap tech names to own over the coming years.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
