Microsoft Gets an Upgrade as AI Narrative ‘Too Strong’ to Ignore. 

An analyst at Guggenheim believes that Microsoft’s prospects in artificial intelligence are sufficient to raise his rating on the stock, but the company’s near-term concerns prevent him from becoming optimistic.

On Monday, Guggenheim analyst John DiFucci reduced his previous $232 price objective on Microsoft (ticker: MSFT) shares and upgraded the stock to Neutral from Sell. The analyst stated in a research note that the company’s AI potential is “too strong a force to contend with” and sufficient to keep him from a negative perspective, but that he still has some reservations.

Even if the unsettling dynamics we anticipated would emerge, DiFucci asserted that the “Generative AI narrative is too positive a force to contend with.” “Windows has continued to struggle as it’s become obvious that an important driver of this business, PC shipments, will not benefit from the resurging relevance of these devices and in hindsight, were a Covid beneficiary like Zoom and DocuSign,” said a Covid spokesperson.

Due to people working from home and taking classes online, the pandemic did increase demand for personal computers. However, as COVID-19 limits were loosened, the demand environment suffered, which had an effect on numerous computer and chip makers.

Microsoft’s personal computer unit announced fiscal fourth-quarter revenue of $13.9 billion in July, a 4% reduction from the same period the previous year. However, there are some encouraging indicators in the PC industry. According to a survey released by the market research company IDC on August 28, 2024, is expected to see PC shipment growth of 3.7% year over year, despite a consumer under pressure due to high inflation.

MICROSOFT TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

Microsoft is currently trading within a down channel.

Microsoft is positioned below all Moving Averages (SMA).

The Relative Strength Index (RSI) is in a bearish zone, while the Stochastic oscillator suggests a negative trend.

Immediate Resistance level: 316.23

Immediate support level: 310.71

HOW TO TRADE MICROSOFT

Following a rapid rise, the price of Microsoft dipped and began trading lower until it struck support. The price then tried to rise again but was unable to sustain an upward trend, and as a result, the price fell. Price is currently trading at a crucial support level; if this level breaks down, additional decline is possible.

TRADE SUGGESTION- STOP SELL – 307.61, TAKE PROFIT AT- 292.37, SL AT- 319.28.