{"id":48652,"date":"2026-04-09T11:35:36","date_gmt":"2026-04-09T11:35:36","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2026\/04\/09\/cheap-microsoft-stock-could-drop-further-before-recovery\/"},"modified":"2026-04-09T11:35:36","modified_gmt":"2026-04-09T11:35:36","slug":"cheap-microsoft-stock-could-drop-further-before-recovery","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2026\/04\/09\/cheap-microsoft-stock-could-drop-further-before-recovery\/","title":{"rendered":"Cheap Microsoft stock could drop further before recovery"},"content":{"rendered":"
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Microsoft stock has crashed into a technical bear market after plunging from $550 to the current $372. This retreat has coincided with the ongoing sell-off in software stocks and as concerns about its massive capital expenditure continues. So, will the stock rebound now that it has become a bargain?<\/p>\n

Microsoft stock has plunged amid AI disruption fears<\/h2>\n

The ongoing MSFT stock crash has coincided with the drop of other software companies like Adobe<\/a>, Atlassian, AppLovin, and ServiceNow. Investors are simply concerned that their businesses will be disrupted by new AI tools by companies like Anthropic and OpenAI.<\/p>\n

Microsoft stock has also dropped as concerns about Copilot, its AI tool continue. While millions of customers are using its free version, only a small percentage of them are willing to pay for it. Instead, customers are opting for other mainstream tools like Claude, Grok, and ChatGPT. <\/p>\n

Most importantly, investors are concerned about the growing capital expenditure and whether the company will have a return on its investment.<\/p>\n

Microsoft spent $37.5 billion in capital expenditure in the last quarter, up by 66% from the same period a year earlier. And the management plans to spend over $100 billion in capital expenditure this year. While this investment is good, investors are now waiting to see its incremental value in its earnings.<\/p>\n

There are concerns that the company\u2019s business is slowing down. Its most recent results showed that its revenue jumped by 17% to $81.3 billion, while its net income rose by 60% to $38.3 billion. Its productivity and business processes made $34.1 billion, while the intelligent cloud made $32.9 billion.<\/p>\n

Wall Street analysts expect that Microsoft\u2019s revenue will grow by 18% this year, with the growth slowing to 15% in the next financial year. <\/p>\n

On the positive side, there are signs that the company has become a bargain<\/a>. For example, Seeking Alpha data shows that the company has a forward PE ratio of 21, which is slightly higher than the S&P 500 Index average of 20. The multiple is lower than the five-year average of 33 and the sector median of 31.<\/p>\n

Microsoft is also a bargain based on the rule-of-40 calculation, which looks at a company\u2019s revenue growth and its margins. In this case, it has a net profit margin of 39% and a revenue growth of 16%, giving it a multiple of 55%.<\/p>\n

Analysts are largely bullish on the MSFT stock price, with the average estimate being that its stock will jump by 58% to $588. Some of the most bullish are from companies like UBS, New Street Research, and Bank of America, who see the stock hitting $500.<\/p>\n

Microsoft stock analysis suggests more pain before rebound<\/h2>\n
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MSFT stock price chart | Source: TradingView <\/em><\/p>\n

The three-day chart is sending a warning sign to investors. It formed a double-top pattern at $550 in July and October last year. A double-top is a common bearish reversal sign in technical analysis.<\/p>\n

The stock is now about to form a death cross as the spread between the 50-day and 200-day Exponential Moving Averages narrows.<\/p>\n

There are signs that the stock is slowly forming an inverted cup and handle pattern, which often leads to more downside. It is now in the cup section.<\/p>\n

These patterns mean that the stock may continue falling, initially to the key support level at $341. This support coincides with the 61.8% retracement level and the lowest swing in April last year.A move below that level will point to more downside towards the 78.6% retracement level at $282.<\/p>\n

The post Cheap Microsoft stock could drop further before recovery<\/a> appeared first on Invezz<\/a><\/p>\n

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Microsoft stock has crashed into a technical bear market after plunging from $550 to the current $372. This retreat has coincided with the ongoing sell-off in software stocks and as concerns about its massive capital expenditure continues. So, will the stock rebound now that it has become a bargain? Microsoft stock has plunged amid AI <\/p>\n","protected":false},"author":1,"featured_media":48653,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-48652","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/48652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=48652"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/48652\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/48653"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=48652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=48652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=48652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}