Microsoft Stock Crumbles 10% After Earnings Highs – $500 MSFT Support in Focus
Microsoft’s latest results reignited investor optimism, but the stock has since cooled sharply, testing key support zones that will...
Quick overview
- Microsoft's stock surged to record highs above $555 after strong fiscal Q2 results but has since faced selling pressure, testing key support levels.
- Despite impressive Azure performance and strong profitability metrics, the stock is struggling to maintain support around $500 amid profit-taking.
- There is a notable divide in market positioning, with institutional inflows declining while retail investors remain optimistic about Microsoft's fundamentals.
- A protest by Microsoft employees over the company's alleged involvement in Gaza surveillance highlights growing internal dissent and ethical concerns.
Live MSFT Chart
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Microsoft’s latest results reignited investor optimism, but the stock has since cooled sharply, testing key support zones that will determine its next direction.
From Record Highs to Rapid Reversal
Microsoft Corporation (NASDAQ: MSFT) surged to new highs above $555 last week after posting stronger-than-expected fiscal Q2 results. The stock initially rallied more than 10% in early August, peaking at $555.45, before momentum weakened.
INTC Chart Daily – The 20 SMA Is Now Broken
A return to the 20-day simple moving average (SMA) briefly stabilized price action, but this week’s sustained selling pressure dragged shares beneath that critical support. The move lower has left investors questioning whether Microsoft can defend the key $500 level or if a steeper decline toward the mid-$450s could follow.
Azure Powers the Rally, But Support Cracks Emerge
Much of the initial excitement stemmed from Azure’s performance, with annual revenue reaching $75 billion and beating Wall Street’s projection of $74.62 billion. This reinforced Microsoft’s dominance in the cloud space, while operating cash flow rose nearly 15% year over year. Profitability also impressed, with margins at multi-quarter highs, a net margin of 34.6%, and return on equity above 16%. Yet, despite these strong fundamentals, the stock has faced selling pressure in the $515–$520 zone, where profit-taking and institutional trimming have capped gains.
Diverging Investor Flows: Retail vs. Institutions
Market positioning highlights a notable divide. Institutional inflows have dipped below 50% as larger funds turn cautious, citing macro risks ranging from regulatory oversight to geopolitical trade tensions. Retail investors, however, remain more optimistic, keeping inflows near 51% as they look to Microsoft’s robust fundamentals to justify accumulation. This split suggests the stock is entering a transitional phase, where sentiment rather than earnings strength may drive near-term moves.
Microsoft Staff Stage Campus Protest Over Gaza Surveillance Concerns
A group of current and former Microsoft employees staged a sit-in at the company’s east campus in Redmond, Washington, voicing outrage over claims that its software is being used by the Israeli military to conduct operations in Gaza and monitor Palestinians. The protest comes just days after Microsoft announced an independent investigation into the use of its Azure cloud services following reports that Israeli forces are relying heavily on the platform for surveillance.
The employees transformed part of the campus into what they called the “Free Zone,” holding signs with messages such as “Join The Worker Intifada – No Labor for Genocide” and “Martyred Palestinian Children’s Plaza.” The demonstration reflects rising internal dissent and broader questions over the role of major technology firms in global conflicts, with Microsoft now under heightened scrutiny regarding its corporate accountability and ethical responsibilities in war-related use of its products.
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