On February 19, 2026, we published our most recent article on Microsoft. In it, we noted that the stock was still in a broader corrective phase and that a further decline toward $338 was a possibility before there would be room for a new upward move toward the price target of $630.
Four months have now passed, and new quarterly results have been released, so the time has come to take stock once again. Our previous expectations have so far proven remarkably accurate, which reinforces our confidence in the current scenario.
Did you miss our previous articles?
Read our January 22 article here:“Microsoft: Transition Period Offers Great Opportunities. Target price $630”
Read our February 19 article here:“Microsoft: AI fears prevail and create favorable entry points. Target price $630!”
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How did Microsoft’s earnings report turn out?
On April 29, 2026, Microsoft reported strong results for the third fiscal quarter of 2026. Revenue came in at $82.9 billion, an 18% increase compared to a year earlier. With that, the company outperformed analysts’ expectations. Earnings growth was also strong. Net income rose to $31.8 billion, and earnings per share came in at $4.27.
The cloud business, in particular, was once again a key growth driver. Microsoft Cloud surpassed $54 billion in quarterly revenue for the first time, a 29% increase year-over-year. This demonstrates that companies worldwide are increasingly using Microsoft’s cloud services, such as Azure, software solutions, and business applications.
Artificial intelligence also played a major role in the figures. Revenue from AI-related activities is growing rapidly and shows that Microsoft’s investments are contributing more and more significantly to revenue. According to CEO Satya Nadella, the figures confirm that AI is becoming increasingly integrated into the company’s products and services.
Nevertheless, the market reacted cautiously to the figures. This was not because the results were weak, but mainly due to concerns about the high level of investment Microsoft plans to make in the coming years. The company continues to spend heavily on data centers, chips, and infrastructure to enable growth in AI and the cloud. As a result, investors are wondering how quickly these major investments will translate into additional profits. This uncertainty applies not only to Microsoft but also to other major technology companies.
What is the analysts’ outlook on Microsoft’s stock price?
Despite the sharp drop of over 30% since its peak in October 2025, the consensus among analysts remains largely positive. The average rating is “Strong Buy,” with a clear majority of buy recommendations and no sell recommendations. The price targets show a wide range, with the lowest target at $415 and the highest at $680. This indicates that analysts differ in their views on the pace at which Microsoft’s major AI investments will translate into additional revenue and profit.
It is noteworthy that even the lowest analyst target is still above the current share price of $365. Several analysts therefore view the current pullback more as an attractive buying opportunity than as a warning sign, given the company’s consistently strong underlying operating results.
What is Yelza’s outlook on Microsoft’s stock price?
Below you’ll find Microsoft’s stock price chart for the past few years, showing the levels we mentioned earlier and the most likely scenario for the coming period.
Microsoft’s stock price performance has largely followed the scenario we outlined earlier. After peaking in the $550 to $555 range, a correction followed toward $400. The stock price then recovered to the previously mentioned resistance zone around $460. After testing this resistance, the correction resumed toward the current price of $365.
Our model anticipates that Microsoft may first make one final downward move toward $338. We view this level as a key zone where the current corrective phase could come to an end. As long as the stock price remains above this level, the long-term technical outlook remains constructive.
Within this scenario, one could consider building a position in phases starting from the current price, with room to expand further should the price decline toward $338. This approach avoids relying on a single exact entry point and instead takes broader advantage of the expected support zone. A more defensive alternative is to wait until closer to the $338 zone before taking action and to first await further confirmation that a bottom is forming.
If a bottom forms around this zone, an initial recovery toward $460 could follow. Subsequently, the price may temporarily stabilize again before a new upward phase toward the long-term price target of $630 comes into view.
Conclusion
According to our model, Microsoft is currently still in an important transitional phase. The downward pressure on the price over the past few months still fits within the scenario outlined earlier, in which the zone around $338 remains decisive for the further price movement. As long as this level holds, the long-term outlook remains positive, and a recovery toward $460 is likely, followed by a potential move toward our long-term price target of $630.
At the same time, the fundamental picture remains strong. Growth in cloud computing and artificial intelligence remains robust, while high short-term investments are causing some uncertainty among investors. It is precisely this combination of strong operating results and temporary price pressure that, in our view, makes the stock worth continuing to monitor and creates attractive entry points.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts’ own insights and experiences. They are therefore intended for educational purposes only.