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Microsoft Spikes Higher

Shares in tech giant Microsoft are trading higher today ahead of the US open after the group posted another stellar set of results last night for Q1. This marks the seventh straight quarter of earnings growth for Microsoft. On the headline numbers, Microsoft posted Q1 EPS of $2.94 vs $2.84 expected on revenues of $61.86 billion vs $60.86 billion expected. Year-on-year, the company saw its revenues jumping by 17%. The standout gains for Microsoft came from its cloud services which recorded a 31% surge in revenues, well above Wall Street forecasts.
 

AI Gains

The company has been investing heavily in AI and is seeing this bet pay off. Last quarter, Microsoft’s productivity and business processes unit recorded gains of 12%. Its Copilot add on for commercial Microsoft 365 accounts saw more than 10k customers join the program. Indeed, Microsoft noted that this quarter, demand for AI has been running above its available capacity.  Against this backdrop, Microsoft looks set to continue to outperform as it pushed ahead with AI products and services. Indeed, Goldman Sachs has lifted its price target to $515 from $450 on the back of yesterday’s results.
 

Technical Views

Microsoft

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The rally in Microsoft has stalled for now just ahead of the 440 level. However, the correction lower has found support into the 397.18 level with price since bouncing back above. While above this level, and still within the bull channel, the focus is on a continued push higher and eventual break of the 432.95 level. To the downside, should we slip back below 397.18, 364.46 will be next support to watch.  

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