Microsoft’s (NASDAQ: MSFT) share price is holding steady above the near-term $420 support zone as the company battles new antitrust allegations from United States authorities.
Specifically, the Federal Trade Commission (FTC) is investigating the company’s software licensing and cloud computing businesses. The commission is also examining the technology giant’s practices related to cybersecurity and artificial intelligence (AI) products.
With this development emerging at the end of November, MSFT has registered modest gains of over 3% in the past month. At the close of the latest trading session, the stock was valued at $422.89, ending the day up 0.11%.
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Microsoft stock technical outlook
Indeed, the recent price levels would be welcomed, considering that MSFT painted a worrying picture in the past month. Interestingly, the stock formed a ‘death cross’ for the second time in a month.
This bearish pattern occurs when the 50-day moving average (MA) crosses below the 200-day MA, indicating strengthening downward momentum and a potential long-term downtrend.
A review of the MSFT chart indicates that the equity has been trading within a tightening range for several months, coiling around its 200-day Simple Moving Average (SMA).
To this end, the prolonged consolidation hints at a possible upward move for the stock, as the chart formation points to an upcoming expansion, according to an analysis by charting platform TrendSpider in an X post on November 30.
Notably, the stock’s daily chart indicates that Microsoft is displaying a symmetrical triangle formation, with lower highs and higher lows converging. In this case, the price is compressing toward the apex of this pattern.
At the same time, MSFT is showing possible declining volatility, as highlighted by the Bollinger Band (BB) squeeze indicator. This places the next likely target at $460, with a long-term price target at $500.
Market technician Larry Thompson also noted in an X post on November 27 that Microsoft is showing bullish potential near the $420 level, supported by the 200-day SMA.
For traders, Thompson recommended using $405—the 21-day low—as a stop-loss for risk management.
Several fundamentals will likely impact Microsoft, with the antitrust investigation jumping to the top of the list. In addition to the regulatory situation, the company’s advances in AI also influence MSFT stock.
Wall Street analysts’ outlook for MSFT stock
Amid these underlying developments, Wall Street analysts are weighing in on what to expect from the company. Wedbush analyst Daniel Ives maintained an ‘Outperform; rating with a $550 price target despite the antitrust investigation.
According to Ives, the probe is ‘more bark than bite,’ and he predicts it will fade under a potential new FTC chair next year. He expects the company to thrive and be driven by advances in AI.
Finally, Barclays rated Microsoft ‘Overweight’ with a $475 price target, stating that the DOJ’s antitrust case against Google is unlikely to affect Microsoft significantly. Analyst Raimo Lenschow noted that Bing, comprising just 5% of Microsoft’s projected 2024 revenue, limits the case’s financial impact.
Amid the legal troubles, Microsoft’s fundamentals and technical setup seem to be helping the stock maintain a bullish outlook. Considering the MSFT remains in the green even after the emergence of regulatory issues, it could potentially target $500, especially if the tech sector sustains its current momentum driven by AI.
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