Microsoft remains near strong resistance level as robust AI business growth supports the stock
Microsoft shares continue to recover after a major correction, although the stock still trades noticeably below its historical highs. Despite strong financial results and resilient growth in the company’s AI business, Microsoft shares remain under pressure due to profit-taking in the technology sector and investor concerns over excessively high valuations of AI companies.
Additional pressure continues to come from elevated U.S. Treasury yields and expectations of a prolonged period of restrictive Federal Reserve policy.
Azure and Copilot continue supporting the fundamental picture
The key growth driver for Microsoft remains the rapid expansion of its cloud business and AI services. Azure continues to maintain strong growth rates thanks to robust demand for AI infrastructure, while Microsoft 365 Copilot continues to actively expand its corporate audience. The company is intensifying the integration of AI features into Windows, Office, GitHub, and Azure, focusing on automating corporate processes and developing AI agents. Analysts note that the corporate segment remains the most stable source of Microsoft’s long-term revenue growth.
Markets assess risks related to high AI infrastructure spending
Despite positive expectations surrounding Microsoft’s AI direction, investors are becoming more cautious regarding the scale of the company’s capital expenditures. Microsoft continues allocating tens of billions of dollars toward building data centers and purchasing NVIDIA AI chips, which is putting pressure on business margins. At the same time, markets are closely monitoring changes in the partnership between Microsoft and OpenAI, as the company gradually reduces dependence on a single AI model and expands its own multi-model AI ecosystem.
Market outlook and key levels to watch
From a technical perspective, MSFT is attempting to stabilize after a deep correction from its historical highs. Following another pullback toward support near the $400 level, buying demand from this area is contributing to another test of resistance around the $430 level. The chances of breaking above this level and advancing toward the $460–480 area have increased significantly; however, failure by bulls to break through resistance would raise the risks of losing support and declining toward the $380–360 area.
In the near term, as discussed in the article Microsoft strengthens AI ecosystem as OpenAI relationship evolves, Microsoft’s performance will primarily depend on the pace of AI services monetization, Azure growth, and the overall condition of the U.S. technology sector.
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