Microsoft Corporation (NASDAQ: MSFT) stock price plunged considerably on Wednesday after the company released its Q2 FY2023 earnings. In early trading, shares were down about 2%, reflecting that disappointment. This downturn comes as the company prepares to release its earnings report later in the day, raising concerns regarding its financial performance amidst broader economic challenges. Compounding these issues, the United States’ Gross Domestic Product (GDP) has reported a decrease of 0.3% in the first quarter, a figure that was significantly lower than economists’ expectations.
Our next earnings call will delve into these important questions and more. A big focus will be Microsoft’s audacious plans to blanket the Azure cloud services platform throughout Europe. When the tech giant recently announced its equally bold plan to double its data center footprint in Europe by 2027, this shift represents a great investment strategy. This program represents the company’s largest capital investment across 16 European countries, emphasizing Microsoft’s dedication to continuing growth of its international presence.
Additionally, by the end of 2027, Microsoft plans to have over 200 data centers under its Azure cloud segment. The company has committed up to $80 billion for building new data centers this fiscal year alone. Together, this is a great indication of how aggressive D.C. is on growth even in today’s volatile market. According to analysts, anything but a very solid earnings performance will keep Microsoft shares from returning to the $400 to $410 band. This range serves as upper support for investors.
If Microsoft’s upcoming earnings report is weak or lowers its guidance, the shares will almost certainly tumble. In fact, they may all go under the radar, not even rising above the $385 threshold. Microsoft daily stock chart The bullish uptrend has investors following it closely. The stock is flirting with its long-term 200-day Simple Moving Average (SMA), roughly $414.
Capital flows have recently played a significant role in the S&P 500’s recent decline – around a 2% move thanks to analyst revisions. This decline adds even more pressure on Microsoft’s short-term stock performance. Overall market sentiment has been driven by economic signals and investor response to earnings projections from different sectors and industries.
HSBC just revised its bullish forecast for the Shanghai Composite Index. Yet, they’ve released no information about the index or its relationship to Microsoft. The index, as of this writing, trades just shy of 5,447. At the same time, HSBC aims for a 5,600 index cap, showing the widespread caution after the constant ups and downs of the market.