Microsoft stock slides to 6-day low in premarket as profit-taking weighs on AI rally
Microsoft hits record $500 per share before starting Q3 with pullback
Microsoft Corp. stock price enjoyed strong momentum in recent months, powered largely by investor enthusiasm for artificial intelligence and broader tech sector strength.
The rally pushed the stock to a major psychological milestone of $500 per share on the final trading day of June. This marked an all-time high for Microsoft and reflected solid investor confidence as the second quarter closed on a strong note.
Highlights
-Microsoft hits record $500 in June as new quarter begins with profit-taking
-Price tests key support at 20-period EMA while volume suggests mild selling pressure
-Focus shifts to $485–480 zone as potential downside target if $489 support fails
However, the narrative shifted at the start of the third quarter. On July 1, Microsoft stock dropped by 1.3% to a four-day low of $491 before closing slightly higher at $492. The decline came on lower trading volume compared to the three preceding days, indicating that sellers were not yet aggressive despite the price drop. The reduced volume suggested a temporary pullback rather than a sharp reversal.
Microsoft stock price dynamics (May - July 2025)
By the premarket session of July 2, the stock price fell further by 0.6% from the previous day's close, reaching $489.15. This move marked a six-day low and broke below the important pivot level of $490. As a result, the decline extended this week's total loss to about 1.66%, signalling that short-term weakness has taken hold following the strong June performance.
Microsoft's short-term losses reach 1.66% as price drifts below $490 pivot
From a technical standpoint, the 20-period exponential moving average on the four-hour chart is acting as a cushion for the price near $489.15. This level has emerged as a key support zone and could trigger a rebound if buyers regain confidence. A successful hold at this EMA support may encourage traders to resume buying, potentially leading to a recovery toward the $500 level.
On the downside, a break below this EMA support opens the path toward a buyside inefficiency zone left in June. This gap, ranging from $485 to $480, might attract sell orders, serving as a draw for liquidity. The $480 level, which acted as support last month, could be retested if the price slips further below current levels.
Fundamentally, Microsoft's rally has been tied to its leadership in AI-related products and cloud services, drawing significant investor attention. But the recent pullback suggests profit-taking and cautious sentiment entering the new quarter. Traders will closely watch price behavior around the $489 support and the potential drawdown to the $485–480 range to gauge whether the uptrend can resume or if a deeper correction unfolds.
Microsoft overcame the AI chip delay and attracted strong buying interest last quarter. Microsoft stock bounced above support and targeted the $500 level.
