Microsoft stock extends rally toward $500 milestone as AI optimism drives new highs

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Microsoft momentum holds above $490

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Sholanke Dele

27.06.2025

Microsoft stock extends rally toward $500 milestone as AI optimism drives new highs — Microsoft defies overbought signals

Microsoft Corp. stock price has continued its impressive rally this week, notching consecutive daily gains that pushed the share price to a new record high of $498.2 on Thursday. This move extended the week’s total advance to more than 4% by the close of yesterday’s session. Microsoft stock price has defied technical overbought conditions seen on both the daily and 4-hour RSI, reflecting strong investor confidence and sustained buying interest.

• Microsoft rises over 4% this week and prints a record high at $498.2

• Morgan Stanley lifts target to $530, reinforcing bullish sentiment on AI-led growth

• Microsoft eyes $500 breakout today despite overbought RSI and cooling volume

Despite the declining volume that accompanied the early part of the week’s rally, Microsoft stock showed no signs of fatigue. As of Friday’s premarket session, the share price is trading near $497.1, suggesting a likely move toward the psychological $500 per share mark in the next session. This would represent a symbolic and technical milestone for the company and signal continued market support for Microsoft’s growth narrative.

Microsoft stock price dynamics (Oct 2024 - June 2025)

A key driver of this momentum has been renewed bullish sentiment following Morgan Stanley’s upward revision of its price target to $530. The investment firm maintained its Overweight rating, citing growing confidence in Microsoft’s expanding role in the generative AI space. The report highlighted stronger returns on AI investments, particularly through Azure’s integration of OpenAI models. While some investors have expressed concern about the returns on such large-scale capital expenditure, Morgan Stanley’s updated projections point to improved visibility on future revenue.

Microsoft momentum holds above $490 as Morgan Stanley forecast lifts sentiment

The broader market is now pricing in Microsoft’s leadership in enterprise AI solutions. Morgan Stanley’s analysts noted that Microsoft holds a first-mover advantage in the next phase of AI development, and that solid execution in this segment could drive further upside in the stock.

Technically, the trend structure continues to support the bulls. If Microsoft breaks above the $500 threshold during today’s session, the move would reinforce the broader bullish channel and pave the way for a potential extension toward the $510 to $520 zone. On the downside, the nearest support sits around $488, a minor pullback zone from earlier in the week.

Microsoft is now on course to register a fifth consecutive week of gains, fueled by both strong fundamental drivers and positive investor sentiment. The confluence of bullish technicals and AI-driven growth expectations leaves little immediate pressure on the stock, even in the face of short-term overbought signals.

Microsoft stock broke above $492 and extended gains even as RSI stayed overbought. The rally defied Powell’s hawkish tone and growing geopolitical tensions.

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