MSFT remains under pressure after a sharp June selloff, with the stock trading near $368.50 on the hourly chart after rebounding from the $350 area. The move reflects a broader re-rating of AI-linked mega-cap tech, as investors question whether Microsoft’s aggressive infrastructure spending can translate into enough free cash flow growth.
AI spending overhang
The latest concern is not weak demand, but capital intensity. Microsoft reported strong fiscal Q3 results, with revenue up 18% to $82.9 billion and Azure and other cloud services revenue up 40%. However, capex rose sharply as the company expands AI data-center capacity, keeping pressure on margins and free cash flow expectations.
Cloud fundamentals
The fundamental story remains solid. Microsoft Cloud revenue rose 29% to $54.5 billion, while commercial remaining performance obligations increased 99% to $627 billion. Microsoft also said its AI business surpassed a $37 billion annual revenue run rate, up 123% year over year. That gives bulls a strong long-term case, but markets now want clearer evidence of return on AI investment.
Technical picture
On the chart, MSFT is still in a downtrend after failing near $460 and sliding toward $350. The rebound to $368-$369 looks constructive, but price remains below key moving averages and below the $380-$390 resistance area. A move above $390 would ease near-term pressure and open the way toward $400-$410. Support sits at $360 and $350, with a break lower risking continuation toward $340.
Conclusion
Base-case outlook remains cautiously negative. Microsoft’s cloud and AI fundamentals are strong, but current price action shows investors are repricing the stock around capex, free cash flow, and AI monetization risk. Until MSFT reclaims $390, as was written in the article Microsoft rebounds near $373 as AI spending weighs on sentiment, rebounds look corrective, while a break below $350 would confirm another leg lower.
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