Microsoft Corp (NASDAQ:MSFT) stock could regain momentum as improving AI execution, cloud growth and financial balance address investor concerns, according to BNP Paribas analyst Stefan Slowinski.

• Microsoft stock is trading at depressed levels. Where is MSFT stock headed?

Copilot Push Aims To Restore Confidence

Slowinski said investor frustration stems from limited traction in Microsoft's Copilot offering despite its leadership in SaaS through 365 Commercial Cloud.

He noted that CEO Satya Nadella is driving a "Copilot code red" effort to improve performance and the user experience, with the E7 suite launching on May 1 and additional features rolling out throughout the year. He added that early product feedback is improving, and a stronger Copilot perception could ease investor concerns, especially as competition from Anthropic remains a risk.

Azure Growth Could Surprise Despite Capacity Concerns

Slowinski said Microsoft allocated about 30% of new cloud capacity last quarter to internal uses such as Copilot and large language model development, raising investor concerns about competition with partners like OpenAI. Despite this, he said Azure could still exceed consensus expectations even if internal usage rises to 50%, supported by growing token demand and higher GPU pricing.

Balancing Capex, Cash Flow and AI Monetization

Slowinski said Microsoft could better balance capital spending, free cash flow, and growth as it leverages neocloud partner capacity, potentially slowing capex expansion. He added that strong free cash flow margins of around 20%, combined with improving Copilot sentiment and potential upside in Azure, could help put the stock back on track.

Technical Analysis

At $368.93, Microsoft is trading 2.9% below its 20-day simple moving average (SMA), the stock's average price over the last 20 sessions, which suggests the near-term trend is still tilted lower. It's also 15.9% below its 100-day SMA, indicating the intermediate trend remains pressured, and rebounds may face overhead supply.

The moving-average structure remains a headwind, with the 20-day SMA below the 50-day SMA and a death cross in January (when the 50-day SMA fell below the 200-day SMA), consistent with a longer-lasting downtrend. Moving average convergence divergence (MACD), a trend/momentum measure, is slightly constructive, with the MACD at -9.3784 above the -10.5723 signal line, suggesting that downside momentum is easing, even if the trend is still negative.

  • Key Resistance: $413 — an area where rallies have recently struggled to push through.
  • Key Support: $356 — a level where buyers have tended to show up to slow declines.

Earnings & Analyst Outlook

Following last quarter's results, investors are now tracking the path toward the next reporting date on April 29 (confirmed).

  • EPS Estimate: $4.07 (Up from $3.46 year-over-year)
  • Revenue Estimate: $81.38 billion (Up from $70.07 billion YoY)
  • Valuation: P/E of 23.4x (Suggests fair valuation relative to peers)

Top ETF Exposure

  • iShares S&P 500 Growth ETF (NYSE:IVW): 9.48% Weight
  • State Street SPDR Portfolio S&P 500 Growth ETF (NYSE:SPYG): 9.60% Weight
  • iShares Core S&P US Growth ETF (NASDAQ:IUSG): 9.55% Weight

Significance: Because Microsoft carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

Price Action

MSFT Stock Price Activity: Microsoft shares were down 0.84% at $371.17 at the time of publication on Thursday, according to Benzinga Pro data.

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