Microsoft (NAS 100:MSFT) releases its latest earnings report in a big week for U.S. markets.
MSFT – Daily Chart
MSFT shares are probing the recent resistance level at $531.52 and that allows potential for a move to $555.20.
Tech giant Microsoft will deliver its latest earnings report after the U.S. market closes on Wednesday.
Options pricing is predicting a move of around 4.4% in either direction this week. That would mean an all-time high of $ 546 or a move lower to $500.
A strong report from Microsoft would be important to the broader market, due to the company’s $4 trillion market capitalization. It’s also a bumper week for the indices, with a Federal Reserve rate cut decision ahead and a potential trade agreement between the U.S. and China.
Microsoft stock has been positive this year, with a gain of around 26% year-to-date, but the shares have been lower since the record high posted with the July earnings report. Economic uncertainty has been a drag on the shares during the first months of the year.
Analysts are expecting another quarter of strong revenue and earnings growth from the company’s Azure cloud computing platform, which generates revenue by providing a platform for cloud and AI workloads. That division is expected to grow by 38% year over year.
AI investments will be another important factor for analysts, following management’s prediction that $30 billion would be spent during the quarter. Bank of America analysts said in a research note that an increase in Microsoft’s capex guidance could boost the company’s stock.
The consensus is very bullish on Microsoft, with all 16 tracked by Visible Alpha giving the stock a Buy rating, and the median target price is around $640, which is an upside of 20% from current levels.
“We see investors’ expectations getting closer to 40%, which we could characterize as optimistic but realistic,” said Raymond James analyst Andrew Marok.
Further earnings are released by fellow tech heavyweights Meta and Alphabet, which is setting up potential for a big market move this week.
