Microsoft (MSFT) shares soared nearly 9%, opening with a major bullish gap. After closing at around $391 on April 30, the stock surged to end just under $425 the following day.
What Sparked the Rally?
The rally followed Microsoft’s release of its Q1 2025 earnings, which beat Wall Street forecasts across the board. Revenue came in at $70.1 billion—2.4% above expectations—while earnings per share hit $3.46, exceeding projections by 7.4%.
Investors were particularly impressed by the performance of Azure. Revenue from Azure and other cloud services jumped 33% year-over-year, driven by strong demand for AI-powered solutions. This helped ease investor concerns over the return on Microsoft’s extensive AI-related infrastructure spending.
Adding to the optimism, Microsoft issued a positive outlook for the next quarter, further boosting market confidence and fueling the stock’s upward momentum.
MSFT Technical Outlook
Despite the rally, yesterday’s candlestick closed near its low, suggesting selling pressure emerged later in the session (as indicated by the arrow on the chart). Technically, this pullback aligns with MSFT approaching two significant resistance levels:
- Upper boundary of a descending channel, supported by past price action (marked with red) and the stock’s interaction with the channel’s median line (dashed).
- A former support trendline that had held throughout 2024.
As a result, a short-term pullback remains a possibility after the sharp rally in MSFT shares, which could dampen the initial excitement sparked by Microsoft’s impressive quarterly results.
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