Microsoft stock remains under pressure despite strong AI and cloud expansion
Microsoft struggles to find the bottom and rebound from it
Microsoft (NASDAQ: MSFT) is currently trading in a downward trend, having broken out of a parallel channel but still facing resistance at key technical levels. The stock is losing momentum as it trades below critical exponential moving averages (EMAs) and Fibonacci retracement levels.
The stock has been moving lower, failing to reclaim the 50-day EMA at $403.36, which is now acting as a resistance zone. The 200-day EMA at $412.97 is a significant long-term resistance level that Microsoft must surpass to shift momentum in its favor.
The Fibonacci retracement levels confirm these resistance zones, with the 38.2% level at $404.22 acting as a key hurdle, while the 61.8% level at $421 represents the most critical breakout point for any potential recovery. If MSFT fails to move above $404.22, further downside toward support levels is likely.
MSFT stock price dynamics (December 2023 – March 2025). Source: TradingView.
The immediate support level sits at $380, with a further decline likely toward $370 if selling pressure intensifies. If bearish sentiment continues, MSFT could test the $360 region, which would mark a deeper correction.
Market context
Microsoft remains a dominant force in the AI and cloud computing sector, with its Azure AI, Copilot integration, and OpenAI partnership driving long-term growth. However, short-term market conditions and macroeconomic uncertainty have put pressure on high-valuation tech stocks, including MSFT.
The Federal Reserve’s stance on interest rates has created uncertainty, leading to a shift away from tech stocks in recent weeks. Meanwhile, earnings growth remains solid, with Microsoft’s Q4 2024 results showing 14% revenue growth, largely driven by Azure’s 22% expansion. Despite this, investors appear hesitant to bid the stock higher, with technical resistance levels limiting upside movement.
Institutional investors may be waiting for MSFT to reclaim the 50-day EMA ($403.36) before stepping in, as the recent breakdown suggests weakness in buying momentum. If the broader market stabilizes and rate concerns ease, Microsoft could see a reversal.
Price forecast
Microsoft’s short-term outlook remains bearish-to-neutral, with $404.22 as the key level to watch. A failure to reclaim this level could see MSFT extent losses toward support at $380 and $370.
-Bullish scenario: A move above $404.22 (Fibonacci 38.2%) could trigger a recovery toward $412.97 (200-day EMA). A breakout above $421 (Fibonacci 61.8%) would confirm a bullish reversal.
-Neutral scenario: Sideways consolidation between $380 and $404, with investors awaiting a clear breakout before taking positions.
-Bearish scenario: A drop below $380 could accelerate selling toward $370 and potentially $360 if macroeconomic conditions worsen.
For now, Microsoft remains in a downward trajectory, and unless the stock reclaims at least $404, the risk of further downside remains high.
On the upside, the stock should first test strong resistance near $420.
On the downside, this year's low at $376.91 provides good support.
As we have already mentioned, Microsoft was testing resistance, with a potential breakout above $396 and even $420. A decline below $384 is necessary to see further losses toward $376.
