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Boasting a market capitalization of $3.1 trillion, Microsoft Corporation (MSFT) is a global technology force known for its software, hardware, and cloud services. It develops products like Windows, Office, and Azure, and owns brands such as LinkedIn and Xbox. Headquartered in Redmond, Washington, Microsoft focuses on innovation across computing, AI, and digital transformation solutions.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and MSFT definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance within the tech sector. Microsoft's broad product ecosystem, strong brand, and leadership in software and cloud computing stand out. Additionally, the integration of AI technologies and a large enterprise customer base further strengthen its position in the market.
Despite the company's strong performance, Microsoft shares have dropped by 9.6% since hitting a 52-week high of $468.35 on July 5. Over the past three months, MSFT stock gained 2.5%, underperforming the Dow Jones Industrials Average’s ($DOWI) 8.7% gains during the same time frame.
In the longer term, MSFT shares rose 12.6% on a YTD basis and 11.8% over the past 52 weeks, trailing the Dow Jones’ 19.2% surge in 2024 and 26.8% returns over the past year.
Microsoft stock has traded below its 50-day and 200-day moving average since mid-July, indicating a bearish trend.
Adding to the bearish momentum, Microsoft shares declined marginally on Nov. 29 after the US Federal Trade Commission initiated an antitrust investigation into the company. The probe, approved by FTC Chair Lina Khan, seeks to determine whether the company is engaging in anticompetitive practices. The current investigation comes after a series of cybersecurity incidents involving Microsoft's products.
Microsoft’s rival, Oracle Corporation (ORCL), is in the lead, with its shares gaining 75.3% in 2024 alone, and rising 59.1% over the past 52 weeks.
Nevertheless, Wall Street analysts are highly bullish on Microsoft’s prospects. The stock has a consensus “Strong Buy” rating from the 40 analysts covering it, and the mean price target of $504.45 suggests a potential upside of 19.1% from current price levels.
