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Trends & Analysis
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Trends & Analysis
News

Week Ahead Preview: 22nd of April

News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

Asset Watch

Will Microsoft dazzle into year-end?

Thursday, October 19, 2023

While higher interest rates remain problematic for risk assets, the shock and awe of bond market selloffs seems to have dissipated. Investors have become less reactionary to rate rises, which bodes well alongside bullish seasonality.

 

And with Piper Sandler analyst Brent Bracelin calling Microsoft his highest conviction large-cap stock, he sees plenty of upside into year-end. He has an overweight rating, a $400 price target, and noted that the Nov. 1 launch of Microsoft 365 Copilot should be a boon for the company’s recurring revenue. Citing a 181% increase in Microsoft’s information webpage visits, he wrote:

 

“So far, the accessibility of M365 Copilot under a paid preview has been limited to ~600 enterprises… We are encouraged by 3P web traffic data showing a sharp spike in unique visitors that could be prepping for Copilot.”

Yet, though the fundamentals remain resilient amid a challenging macro environment, Microsoft is on the precipice of medium-term support, so holding the line is essential for the bulls.

The left side of the chart shows how the stock’s 20-week moving average held during most of the 2021 surge. Likewise, Microsoft bounced off its 20-week MA in March 2023 before a major rally unfolded. Therefore, as the stock closes above the milestone on Oct. 17, continued strength supports higher highs in the months ahead.

Should we expect a year-end surge, or will the prior breakdown turn into something more ominous?


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