Microsoft (NASDAQ: MSFT) stock’s 17.61% June decline from $460.52 at the beginning of the month to $379.40 at the latest close might have presented a historical buying opportunity.
Specifically, the blue-chip technology giant has fallen below its 200-week moving average (MA) in a move that has, historically, tended to precede substantial rallies, per a Barchart X post from Thursday highlighting the setup.
Here’s how much Microsoft stock can rally
Notably, Microsoft shares found themselves in a similar situation late in 2022 and early in 2023 when they traded below $230, and investing $1,000, for example, at the time would have yielded $686 in profits as MSFT stock soared 68.62% since the lows.
Even more notably, the technology giant presented the same opportunity of falling below its 200-week MA in the early 2010s when it dropped under $25. Buying at the time and holding long-term would have meant seeing an investor’s position soar 1,620%.
Still, it is also worth remembering that MSFT stock’s overall performance means that an investment made at almost any point since the initial public offering (IPO) would have led to very large profits by press time.
Why Microsoft stock might continue the June crash despite buy signal
Elsewhere, the June 2026 stock market situation might be more similar to the few times when the technical buy setup did not yield strong returns: the Dot-com bubble and the Great Recession.
Microsoft shares have been struggling year-to-date (YTD) and even recorded one of their worst first quarters (Q1) on record, highlighting a lack of confidence in the firm’s continued success.
More recent developments made the risks starker, as one of the major limiting factors for the equity has been the firm’s backlog reliance on OpenAI – a firm long believed to be deeply unprofitable and, based on a leak reported on by Ed Zitron and the Financial Times, confirmed to have its losses grow far faster than revenue.
Indeed, between the relatively widespread user dissatisfaction with Microsoft’s products – dissatisfaction that led to the proliferation of the moniker ‘Microslop’ – the company getting in legal trouble in Australia over misleading some customers that they have no choice but to pay for Copilot, and the growing debate over the costs of artificial intelligence (AI), the firm might be in short supply of tailwinds.
UBS warns investors to reduce exposure to big tech
Lastly, despite the favorable technical setup presented by the early June bloodbath, UBS was among the institutions that recently warned that reducing exposure to big tech might be a savvy move.
While the banking giant’s trading desk highlighted semiconductor stocks as especially risky due to their recent rallies, most of the technology sector has been highly dependent on the continued AI boom narrative and arguably valued based on future business performance that is far from guaranteed.
Featured image via Shutterstock
