Microsoft Corp (NASDAQ:MSFT) shares are sliding on Thursday. Stifel reduced its price target and maintained its Hold rating. Here’s what you need to know.
- Microsoft stock is testing lower boundaries. What’s pressuring MSFT?
Stifel Cuts Price Target On Margin Pressures
Stifel analyst Brad Reback kept a Hold rating on Microsoft but lowered his price target to $400 from $415.
He warned that Wall Street’s fiscal 2027 gross margin expectations do not fully reflect the impact of Azure’s rapid expansion and the continued squeeze on cloud margins caused by rising capital spending, according to Investing.com. Stifel’s model shows fiscal 2027 gross margins falling about 450 basis points from the prior year to roughly 63%.
The firm pointed to a shift in Microsoft’s revenue mix as the core issue. Azure is growing nearly three times faster than the rest of the company, and Stifel expects Azure’s gross margin to continue compressing by 100 to 150 basis points each quarter through fiscal 2027.
On the earnings side, Stifel said the Street’s fiscal 2027 EPS estimate of about $19.45 may be roughly $1.00 too high. The firm also highlighted that rising finance lease obligations could further weigh on earnings per share growth, even as management continues to target double digit operating income growth.
Critical Levels To Watch For MSFT Stock
Microsoft’s longer-term trend remains under clear pressure. The stock sits 12.7% below its 20-day simple moving average, 14.6% below its 50-day simple moving average, 12.6% below its 100-day simple moving average, and 21.7% below its 200-day simple moving average. That kind of distance from the major trend lines shows that every bounce has been sold quickly and that price has not been able to regain any of the key moving averages that typically define trend direction.
Momentum indicators also reflect stress. RSI is at 28.85, which signals that selling pressure has reached levels where the move is considered stretched. Readings below 30 often appear when declines become emotional or capitulation driven, although they do not guarantee that a durable bottom is in place.
The broader trend structure continues to work against the bulls. The 20-day average is below the 50-day average, and the death cross from January, when the 50-day average slipped under the 200-day average, still defines the longer-term bias. With the stock down 28.63% over the past year, traders will likely treat any rebound as a test rather than a trend change until Microsoft can reclaim the major moving averages.
- Key Resistance: $413.00 — This level sits near a cluster of intermediate moving averages and represents the closest ceiling where rebounds often stall.
MSFT Shares Are Slipping
MSFT Price Action: Microsoft shares were down 3.90% at $351.22 at the time of publication on Thursday. The stock is trading at a new 52-week low, according to Benzinga Pro.
Image: Shutterstock
Login to comment