Microsoft demand weak but upside potential still intact

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Anton Kharitonov

22.04.2026

Microsoft demand weak but upside potential still intact — MSFT

Artificial intelligence continues to be the main driver for the tech sector and, at the same time, the key risk factor for companies like Microsoft.

News headlines increasingly emphasize that the AI boom is far from over, and Microsoft is seen as one of the primary beneficiaries. At the same time, investors are well aware that this path is tied to massive spending on data centers, GPU clusters, and infrastructure. In the current phase, the market’s view is that AI investments will ultimately generate profit, but with a delayed payoff that requires patience and tolerance for a temporary spike in expenses.

Spending on AI infrastructure is already turning into an “AI‑spend spree.” Major tech companies, including MSFT, continue to invest aggressively in capacity, storage, and compute units, yet the question “will these investments pay off?” is starting to grow louder. AI used to be perceived almost exclusively as a growth driver, whereas now investors are looking more closely at the cost‑to‑benefit ratio. In this sense, there is a meaningful shift in the narrative: the market still believes in AI, but it now treats it as an expensive growth story, not a free ride.

The recent sharp rebound in Microsoft’s stock also raises questions about the true nature of the move. Over the past several days, MSFT has posted a strong rally that analysts have described as an “extreme bounce” and a “reset of expectations” around the company. Part of this move can be explained by pre‑earnings positioning rather than the emergence of a new, sustained trend. In an environment where expectations for the upcoming quarterly report are particularly high, the market tends to overshoot on the way up, rather than to reprice fundamentals in a steady fashion.

At present, the earnings report is acting as the main catalyst. The entire session is effectively centered on the answers to a few key questions: is Azure growth accelerating, is demand for AI products such as Copilot increasing, and how is this segment starting to contribute to margins? In this context, the stock is trading less as a reflection of current fundamentals and more as a bet on the report‑driven catalyst, where any gap between expectations and reality may trigger a sharp move either lower or higher.

Thus, after testing resistance near 432 dollars, where the 200‑day EMA sits, the share price has come under renewed pressure, though the downside has been contained by support around 417 dollars. Nonetheless, demand remains present on the decline, and today the stock is trading at about 427 dollars in the pre‑market, which suggests a positive start to the U.S. trading session. Above 417 dollars, the odds of breaking that resistance and rallying toward the 450–455 dollar zone stay elevated; a loss of support would likely trigger a move toward the 405–400 dollar area, where the stock is expected to continue to find buyers on the way down.

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