Sign InMicrosoft (MSFT) Stock Shows Positive Momentum with Potential for Short-Term Rise
Summary
Microsoft (MSFT) closed at $346.87 on July 20, 2023, with a day's change of -2.31%, and technical and fundamental analysis suggests that the stock price may rise in the short term and continue its upward trend in the following week, providing attractive trading opportunities, while also remaining an attractive long-term investment with promising estimations from analysts and endorsements from entities such as the White House.
Summary
Microsoft (MSFT) last closed at $346.87 on July 20, 2023, seeing a day's change of -2.31%. The stock price fluctuated between $345.37 and $357.97. MSFT has a year's low and high of $213.43 and $366.78, respectively. With outstanding shares of approximately 7.44 billion, Microsoft's market capitalization is roughly $2.54 trillion.
Technical Analysis
The 14-day Relative Strength Index (RSI14) for Microsoft stands at 60, indicating that it's currently neither oversold nor overbought.
MSFT's 50-day moving average (MA) stands at $331.17, while the 200-day MA is at $274.08. Since the last closing price is higher than both averages, it indicates a positive momentum.
The 3-month Moving Average Convergence Divergence (MACD) of 1.83 also concurs with the upward trend, suggesting that the company may continue to build on its recent upticks.
Fundamental Analysis
With earnings per share (EPS) of $9.23, MSFT's price-to-earnings ratio comes in at 37.02. Stocks with higher P/E ratios could be overvalued, however, companies with strong earnings growth like Microsoft may deserve a high P/E.
The discounted cash flow (DCF) value is at $343.51, being somewhat close to the current stock price shows the company's stock is reasonably valued.
The consensus analyst target price for MSFT is $312.51, with the highest estimate at $420 and the lowest at $220. This range between the maximum and minimum price estimates represents the breadth of views within the analyst community.
Earnings announcement is expected on July 25, 2023, which could potentially drive volatility in the stock's price.
Recent Developments
MSFT is fostering efforts to develop a legal regime for regulating AI technologies in the U.S. and globally. This data security initiative has won endorsements from various entities, including the White House.
Moreover, Goldman Sachs predicts that MSFT stock can surge to $400, reinforcing the upward trend suggested in the technical analysis.
Forecast and Evaluation
Considering the technical and fundamental data as well as recent developments, MSFT might see its stock price rise in the short term. The market might continue this positive momentum until the earnings announcement date, providing potentially attractive short-term trading opportunities.
Bearing the technical indicators and analysts' high price target of $420 in mind, it is likely that the stock price could increase on the next trading day (July 21, 2023) and possibly continue this trend during the following week.
Considering the high P/E, the company seems slightly overvalued at the moment, but considering its bold moves in AI technology, strong EPS and endorsement from the White House, Microsoft remains an attractive long-term prospect.
Final Evaluation
Given this information, Microsoft stock would be classified as a "Hold". Considering the company's well-poised technical parameters, progressive advances into AI, and promising estimations from analysts (Goldman Sachs), it could potentially offer lucrative opportunities for long-term investment, despite short-term price uncertainties. One should closely watch the upcoming earnings release to make more informed decisions about the prospects of this stock.
