Microsoft stock price forecast: Rangebound trade as MSFT steadies near $378

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Microsoft slips 0.40% today to $378.12

Highlights

Microsoft faces increased legal and regulatory risk after a securities fraud class action lawsuit over AI disclosures and Copilot issues.
AI-related revenues surged 123% year-over-year, but the failed $3 billion Oracle cloud deal restricts further cloud expansion.
Shares are under sustained seller pressure, trading below major moving averages, with technicals pointing to a bearish trend and a 76% likelihood of further downside within a $367.25–$388.99 range short term.

Legal action and cloud deal collapse weigh on AI-driven gains

Microsoft is facing a securities fraud class action lawsuit alleging that the company and certain executives made materially false statements about its AI initiatives and reported operational issues with the Copilot product, introducing heightened legal and regulatory risk and weighing on shareholder sentiment. In addition, Microsoft recorded a substantial 123% year-over-year increase in AI-related revenues, demonstrating strong momentum in its AI segment, though this has been accompanied by broader risk from legal developments. The company also saw a planned $3 billion cloud leasing deal with Oracle collapse due to FedRAMP security compliance issues, limiting the expansion of its cloud business.

Downtrend confirmed as momentum and oversold signals intensify

MSFT is trading below its MA-20 at $391.54 and MA-50 at $393.30 on the working timeframe, with the MA-200 at $451.94 on the daily chart acting as a longer-term ceiling. The Ichimoku Kijun at $389.60 now serves as immediate resistance. Short-term momentum indicators reinforce downside risk, as both MACD and ADX support a downward trend, while RSI (28.53), Stoch RSI, and CCI all exhibit oversold conditions. The BBP indicator highlights persistent seller dominance, and the Awesome Oscillator aligns with the prevailing negative sentiment. Price action remains close to the session lows, and volatility is moderately elevated, with intraday indicators showing no sign of a reversal.

Downside favored as volatility bands guide near-term moves

In the next 2 sessions, MSFT is likely to trade within a range of $367.25 to $388.99, representing the typical volatility band relative to current levels. There is a 76% probability of continued downside, while the chance of an upward move is estimated at 24%. The baseline scenario expects price consolidation within this corridor; however, a break above $389.60 may prompt a test toward the upper boundary, whereas a drop below support could open the door to additional declines.

Viktoras Karapetjanc, Traders Union expert, sees the legal risks surrounding Microsoft as a clear drag on near-term sentiment. He notes that strong AI revenue growth contrasts with recent headwinds from litigation and the failed Oracle cloud deal. Despite current technical weakness, the analyst believes solid fundamentals could support a rebound if regulatory risks subside. "I remain constructive on Microsoft over the medium term, and see any further downside as a buying opportunity for long-term investors."

Earlier, analysts noted that Microsoft faced increased downside risk amid technical pressure, regulatory headwinds, and setbacks in its cloud partnership strategy. The current environment intensifies these challenges with the addition of a securities fraud lawsuit and ongoing legal uncertainty, making it critical for traders to monitor for heightened volatility and potential further declines if support fails to hold.

Source of Data: MSFT Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.