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Microsoft’s stock price is in the spotlight today as the company explores how to best use its recent financial gains. The stock closed the week at $255, nearly double its lowest point in 2020.
During the pandemic, Microsoft has experienced significant growth across various divisions, including cloud computing, gaming, and virtual reality. For instance, the company recently secured a $22 billion deal to supply HoloLens to the military and won a $10 billion JEDI contract. Additionally, products like Microsoft Teams and Office have gained millions of new users as remote work has become more common. The company’s cloud computing division, Azure, has seen its revenue double during this period.
With these financial successes, Microsoft is now considering its options for reinvesting this windfall. The company has already spent over $7.8 billion acquiring Bethesda Studios, bringing its total number of game studios under the Xbox division to 23. Recent reports suggest Microsoft is considering a $10 billion purchase of Discord, and it is also exploring the acquisition of Nuance Communications.
Nuance Communications is a tech company specializing in conversational AI and ambient clinical intelligence, working with companies across the healthcare and financial sectors. The firm has more than 7,100 employees, generates over $1.4 billion in revenue, and made a $28 million profit in 2021. However, it also carries more than $1.5 billion in debt.
Looking at the stock’s performance, Microsoft’s share price has shown strong momentum recently, surpassing the key resistance level of $245, which was the highest point on February 16th. The stock is currently supported by the 25-day and 50-day moving averages, with the Relative Strength Index (RSI) continuing to rise.
In my opinion, Microsoft’s stock price is likely to keep increasing as we approach earnings season, potentially climbing from $255 to over $280. However, if the price drops below $245, this bullish outlook could be challenged.