By Peter Bergman (MoneyAmped.com)
One of the constituent stocks of the Dow Jones Industrial Average, Microsoft (MSFT), commonly referred to as one of the “Magnificent Seven,” has surpassed its initial buy point and is currently outside the range suitable for purchase. However, it should be noted that the MSFT stock is nearing a new entry point, coinciding with a potential nine-day consecutive period of gains.
The software above corporation has been included in the prestigious IBD 50 list, which comprises prominent growth stocks. Microsoft is included in the IBD Long Term Leaders list, which signifies its inclusion as a stock with commendable potential for purchase during a market decline, owing to its consistent and dependable earnings growth.
The Dow Jones leader exceeded Wall Street’s expectations for its fiscal first quarter on October 24, primarily driven by robust performance in its cloud-computing division. Additionally, the company has revised its forecast for the present quarter. In light of the circumstances mentioned above, there was a notable surge in share prices, exceeding a 3% increase.
In the quarter ended September 30, the company based in Redmond, Washington, reported $2.99 per share on sales amounting to $56.5 billion. According to the consensus estimates provided by analysts surveyed by FactSet, Microsoft was projected to report earnings of $2.65 per share, with sales reaching $54.5 billion. On a comparative annual basis, Microsoft witnessed a notable 27% surge in revenues and a commendable 13% growth in sales.
The earnings growth of MSFT stock has exhibited a progressive acceleration over the previous three quarters, with a notable increase from 10% to 21%, culminating in a reported growth rate of 27% in the most recent quarter.
Microsoft has exhibited notable growth since the beginning of January 2023 and demonstrates robust underlying factors. As per the assessment conducted by IBD Stock Checkup, Microsoft currently holds a commendable IBD Composite Rating of 97 out of 99.
Leading the Dow Jones, Microsoft Corporation Stock Eyes the Next Buy Point
On November 1, the shares of Microsoft exhibited a significant upward movement, surpassing the buy point of 340.86 associated with a double bottom pattern. By IBD MarketSmith chart analysis, it is observed that MSFT is forming a cup base pattern, with a discernible buy point at 366.78.
The Microsoft Corporation (MSFT) stock experienced a marginal decline on Thursday, with trading activity hovering around the price level 363.
The stock’s foundational elements exhibit several robust metrics, such as a favorable up/down volume ratio and an RS line reaching unprecedented levels.
A volume ratio exceeding 1.0 indicates a prevalence of institutional accumulation throughout the previous 50 trading sessions. A relative solid Strength (RS) line signifies significant outperformance of a particular stock compared to the S&P 500 index.
In the context of MSFT stock, it is worth noting that the Relative Strength (RS) line attaining new highs holds significant importance as an indicator, particularly during the initial phases of a developing upward trend.
