The expansion of Microsoft shares “comes” as MSFT targets this price

Microsoft (NASDAQ: MSFT) stock price remains steady above the near-term support zone of $420 as the company battles new antitrust allegations from U.S. authorities.

Specifically, the Federal Trade Commission (FTC) is investigating the company’s software licensing and cloud computing businesses. The commission is also investigating the tech giant’s practices related to cybersecurity and artificial intelligence (AI) products.

With this trend emerging in late November, MSFT posted modest gains of over 3% last month. At the end of the last trading session, the stock was valued at $422.89, up 0.11% on the day.

Technical outlook for Microsoft shares

Indeed, the recent price levels would be welcome considering MSFT painted a worrying picture last month. Interestingly, the stock formed a “death cross” for the second time in a month.

This bearish pattern occurs when the 50-day moving average (MA) crosses below the 200-day MA, indicating stronger bearish momentum and a possible long-term downtrend.

A look at the MSFT chart shows that the stock has been trading in a narrowing range for several months, hovering around its 200-day SMA (Simple Moving Average).

In this sense, the ongoing consolidation indicates a possible upward move in the stock as the chart formation suggests an impending expansion, according to an analysis by the charting platform TrendSpider in an X post on November 30th.

Notably, the stock’s daily chart suggests that Microsoft is in a symmetrical triangle formation with lower highs and higher lows converging. In this case, the price shrinks towards the apex of this pattern.

At the same time, MSFT may be showing decreasing volatility as shown by the Bollinger Band Squeeze Indicator (BB). This puts the next likely target at $460, with a long-term price target of $500.

Market technician Larry Thompson also noted in a Nov. 27 X post that Microsoft is showing bullish potential near $420, supported by the 200-day SMA.

For traders, Thompson recommended using $405 – the 21-day low – as a stop loss for risk management.

Several fundamental factors are likely to impact Microsoft, with the antitrust investigation at the top of the list. In addition to the regulatory situation, the company’s progress in AI also influences MSFT shares.

Wall Street analysts’ outlook for MSFT stock

Given these underlying developments, Wall Street analysts are considering what to expect from the company. Wedbush analyst Daniel Ives maintained an “Outperform; Rating with a price target of $550 despite the antitrust investigation.

Ives says the investigation is “more bark than bite,” and he predicts it will fade next year under a possible new FTC chairman. He expects the company to thrive and be fueled by advances in AI.

Finally, Barclays rated Microsoft “overweight” with a price target of $475 and said the DOJ’s antitrust case against Google is unlikely to materially impact Microsoft. Analyst Raimo Lenschow noted that Bing, which accounts for just 5% of Microsoft’s forecast 2024 revenue, limits the financial impact of the case.

Amid the legal troubles, Microsoft’s fundamentals and technical makeup appear to be helping the stock maintain a bullish outlook. Considering that MSFT continues to remain in the green even after regulatory issues surfaced, it could potentially target $500, especially if the tech sector maintains its current AI-driven momentum.

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