Microsoft jumps 7% as it boosts capital spending plans, citing demand
Microsoft's expansion of capital expenditures and strong backlog growth are key factors. The news of increased investment to meet AI demand, along with the fact that the backlog has grown by 8% compared to the previous quarter thanks to customers outside of large AI companies, is positive.
We focus on the strong performance momentum and the potential for a technical rebound. Although it has shown a -3.0% volatility over the past 7 days and is in a short-term downtrend, there are strong positive factors such as increased capital expenditures driven by AI demand and a growing backlog, making it worthwhile to look for a breakout point through the resistance level.
We will monitor whether the resistance level of 410 is broken. If the resistance level is surpassed and reaches the profit-taking target of $420.0, we will realize the profits. If the support level of 380 is breached, we will execute a sell at the stop-loss price of $375.0.
The RSI(14) is at 50.2, indicating a neutral state, and the moving averages are in a non-aligned condition. The trading volume is somewhat low at 0.68 times the 20-day average.
There is a past similar success case involving a trade of MSFT that occurred on 2026-07-31 03:27:52, with a return of 15.5% (News: Microsoft earnings are out – here are the numbers, etc.).
It achieved a remarkable success with a return of 15.5%, significantly exceeding the forecasted return of 4.2%. Despite taking a conservative approach due to the short-term downward trend and low trading volume, we overlooked the strong news momentum related to the earnings announcement that propelled the stock price explosively.
We will more precisely assess the strength of news momentum. Even if technical indicators are somewhat uncertain, we will actively incorporate the volatility that can accompany strong fundamental news, such as earnings announcements, which have the potential to change the market landscape into our trading scenarios.