Microsoft’s stock price after the earnings report will be strongly affected by its strategy and a few remaining uncertainties.
Key Strategic Issues
The partnership with OpenAI continues to be a major worry for the stock, creating a “stock overhang.” Key details are still unclear, such as Microsoft’s rights to OpenAI’s technology (intellectual property or IP) and the official structure of its investment in OpenAI’s for-profit arm.
To reduce its risk, Microsoft has wisely started using a second major AI model, Anthropic’s Claude, alongside OpenAI’s technology in its Copilot products. This is a crucial move to offer better options to business customers and to avoid relying on just one partner. Investors will be listening closely for information on how well companies are adopting this new, mixed AI strategy.
Stock Price and Valuation Outlook
Microsoft shares have recently been stable, or “consolidating,” around the $523 level after falling from their peak of $554 late this summer.
Technically, the stock is in good shape but is easily affected by new information, especially negative regulatory news, like recent challenges from Australia.
The crucial level where buyers are expected to step in is between $512 and $516. To move higher, the stock must decisively break above $530 to build momentum toward $541 and a potential retest of the record high at $554.
Because the stock’s current valuation is so high, the earnings report is an all-or-nothing event.
A big win, along with very strong forecasts for Azure revenue and spending (CapEx) in the next quarter, is needed to break the $530 resistance and push the stock toward the highest analyst price targets (up to $675).
On the other hand, any disappointment in Azure growth or unclear answers about when its huge spending will turn into revenue could cause the stock to drop toward the critical $512 support level.
Microsoft Daily Chart, October 27, 2025