In 2023, Microsoft Corp (NASDAQ: MSFT) soared by an impressive 56.80%, marking its most exceptional year in two decades. This surge was fuelled by strategic investments in advanced AI, notably OpenAI’s ChatGPT, with over $10 billion poured into this innovation. The resulting race to pioneer AI tools sparked investor enthusiasm, bolstering Microsoft amidst a broader tech sector rally.
The company’s fiscal Q1 2024 demonstrated the innovation’s exploits, with revenue climbing nearly 13% year over year to $56.5 billion. Net income surged by 27% to $22.29 billion, underlining Microsoft’s financial strength.
Anticipating continued growth, Microsoft forecasts a robust 15% revenue surge in Q2, reaching $60.4 billion to $61.4 billion. Moreover, the bold $68.7 billion acquisition of Activision Blizzard positions Microsoft at the forefront of gaming innovation, spanning mobile, PC, console, and cloud gaming realms while setting the stage for the metaverse. This expansion is poised to elevate the gaming division’s revenue and potentially bolster overall financial performance ahead.
Technical
Microsoft’s share price in 2023 showcased a compelling trajectory, hitting an apex at $384.30 per share, setting a robust resistance level. The subsequent dip came amidst overbought Relative Strength Index (RSI) conditions, establishing this peak as a formidable barrier. Despite this, the stock maintains an upward trajectory, comfortably trading above the 100-day moving average, signifying continued bullish sentiment.
A pivotal development emerged as a former resistance point at $361.75 per share was breached, now acting as a supportive level, aligning with the 38.20% Fibonacci Retracement level. This juncture holds significance, potentially curbing downside momentum as the stock retraces from its peak. This level might serve as a critical point for investors, potentially influencing market sentiment. In contrast, if a resurgence of upward momentum occurs, the stock might retest the $384.30 per share mark, marking a potential resurgence in bullish sentiment and further validating the robustness of this peak.
Summary
In 2023, Microsoft showcased its prowess, notching a 56.80% surge—the best in two decades—fuelled by strategic AI investments. Financial strength echoed in Q1 2024, with revenue hitting $56.5 billion and net income soaring to $22.29 billion. With a resilient stock trajectory and strategic acquisitions, Microsoft is poised for continued innovation, potentially elevating both market sentiment and its financial fortitude.
Sources: Microsoft Corp, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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