Microsoft posted impressive results recently, but analysts warn of the risks associated with its stock being overbought in the new market conditions.
Microsoft Stock Analysis
Microsoft reported over $75 billion in revenue from Azure and other cloud services for fiscal 2025, representing a 34% increase from the previous year. However, its RSI (Relative Strength Index) has risen to 78.4, indicating potential trouble. "We’re watching RSI closely now," said Jeff Schulz, managing director at ClearBridge Investments. "Anything near 80 means the stock might need to cool off."
Comparison with Other Companies
Microsoft isn’t the only company on the overbought list. Northrop Grumman, a defense and aerospace company, had an RSI of 76.1 and rose 2.9% for the week. Other companies like Generac (79.1) and Western Digital (74.2) also saw gains despite the overall market downturn.
Overall Market Situation
The week was tough for U.S. indexes: the S&P 500 fell 2.4%, the Nasdaq Composite by 2.2%, and the Dow Jones by 2.9%. In the midst of this, companies like Centene and Molina Healthcare also reached oversold levels with RSIs below 30.
Despite Microsoft’s strong financial performance, experts point out the risks related to stock overvaluation. Investors continue to monitor changes in the market and stock dynamics.
