Microsoft stock forecast: Will it rise or fall after earnings?

After experiencing a challenging period marked by an approximate 20% decline in its stock price this year, Microsoft (NASDAQ: MSFT) is showing signs of renewed strength, with investors defending a critical support level near $350. Despite recent short-term recovery efforts, the stock has faced pressure, declining from highs near $465 last month to the $350 range, due to profit-taking and broader market weaknesses impacting investor sentiment. Nevertheless, the $350 support level has proven resilient, underscoring strong investor confidence.

Microsoft Q4 Earnings Could Provide Fresh Momentum for the Tech Sector

The tech giant is scheduled to release its fiscal fourth-quarter results after the U.S. market closes on Wednesday, July 29. Analysts expect adjusted earnings per share of $4.24 on revenue of approximately $87.7 billion, representing a year-over-year increase of 14.69%. Should Microsoft deliver another positive earnings surprise and raise its guidance, it may bolster risk appetite across Wall Street, with the technology sector poised to lead the advance.

Focus on Azure Growth and Investment in AI

Ahead of the earnings announcement, investor attention is centered on the performance of Azure, the company’s cloud computing segment, along with AI-related expenditures and commentary from CEO Satya Nadella. Azure continues to benefit from robust enterprise demand for AI training and inference workloads. Investors will be closely monitoring whether Azure maintains constant-currency growth in the 39-40% range. Additionally, the market will assess whether investments in AI are translating into monetization. Microsoft plans to invest approximately $190 billion in AI infrastructure, data centers, and cloud capacity over the coming years, representing one of the largest corporate AI investment programs in history.

$MSFT Technical Outlook: Assessing the $350 Support Level

$MSFT formed a strong double-bottom pattern at around $350. In most cases, this pattern is usually followed by a bullish performance. However, the recent recovery has struggled to surpass the 50- and 100-day Simple Moving Averages (SMA), which are critical indicators for medium-term momentum. A decisive move above these averages could signal renewed strength, potentially driving the stock toward the next key resistance near the 200-day SMA at $430-$435. Conversely, a breakdown below $350 may indicate the start of downward momentum. Traders should monitor upcoming earnings results and guidance carefully, as they are likely to provide important signals on the stock’s next significant move.

 

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