Microsoft remains under pressure below $500

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Microsoft tests support below $500

Azure growth keeps fundamentals supportive

Fundamental factors continue to provide support following the fiscal fourth-quarter report, according to which Microsoft increased revenue by 18% year over year to $90.0 billion, while operating income also rose by 18% and adjusted EPS increased by 23% to $4.74.

Azure grew by 43%, Microsoft Cloud generated $59.3 billion in revenue, and remaining performance obligations reached $678 billion, giving the company strong visibility into future revenue. Particularly important is the fact that Azure exceeded $100 billion in annual revenue for the first time, while demand for cloud capacity continues to exceed available supply.

Heavy AI spending puts margins in focus

For investors, the key question now is how effectively the company will be able to monetize its massive investment cycle. Microsoft expects Azure growth to accelerate to around 45% in constant currency in the first quarter of FY2027, while Intelligent Cloud is expected to generate $40.95–41.25 billion. The company also continues to aggressively expand its computing infrastructure: 88 new data centers were launched over the past year, while capital spending in calendar 2026 is estimated at around $175 billion, including changes in the lease structure.

This spending burden is already putting pressure on Microsoft Cloud margins, which declined to 65%, so the market is paying particularly close attention to returns on investments in GPUs, Maia and Cobalt, and to how quickly Copilot and Azure can offset rising costs.

Another important factor is that Microsoft is increasingly positioning itself not simply as a provider of a single AI model, but as a platform that brings together OpenAI, Anthropic and other models within Azure and enterprise applications. On September 23, the company separately emphasized its multi-model ecosystem strategy for businesses, reducing the investment case’s dependence on the success of any single developer.

$490 becomes the key short-term level

In the near term, the combination of strong Azure growth, expanding Copilot adoption and a record backlog should continue to provide support, but the stock still lacks a new catalyst for a decisive breakout from the range.

For now, MSFT remains in a consolidation phase, but the longer the bulls are unable to break through resistance, the greater the risk of a break below $490 and a decline toward at least $480. A move above $500, as noted in Microsoft remains range-bound as AI spending stays in focus, would allow the bulls to test $510 again.

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