Microsoft (MSFT) Shares Drop Over 6% After Earnings Report
According to the Microsoft (MSFT) stock chart:
The candle on 29 January closed around $441 before the company released its Q4 2024 earnings report.
As a result, the 30 January session opened with a significant bearish gap and closed lower at around $415, marking a total decline of over 6%, despite the company exceeding analysts' expectations.
Media reports indicate:
Earnings per share (EPS) stood at $3.23, surpassing the forecast of $3.11.
Total revenue reached $69.63 billion, beating the projected $68.78 billion.
However, investor concerns arose due to slowing growth in Microsoft's Azure cloud segment and rising AI development costs. Business Insider reports that Microsoft plans to spend $80 billion on AI infrastructure this financial year. While this substantial investment aims to strengthen its AI position, doubts remain about its long-term profitability.
The technical analysis of the Microsoft (MSFT) stock chart presents a concerning picture, as the price has dropped to a key support levelthe lower boundary of the upward channel (shown in blue). This channel was formed by a strong bullish impulse in early 2024 (indicated by an arrow), driven by AI enthusiasm. However, sentiment has shifted, with AI now acting as a selling trigger, increasing the risk of MSFT breaking below this key support.
If this happens, MSFT may test the psychological level of $400 per share once again. Notably, in 2024, the price has not stayed below this level for long.
Despite the recent decline, analysts remain optimistic about MSFT stock. According to a TipRanks survey:
27 out of 30 analysts recommend buying MSFT.
The average 12-month price target for MSFT is $508.
Read more: https://fxopen.com/blog/en/oa-microsoft-msft-shares-drop-over-6-after-earnings-report/
Text source: Forex Trading Blog
