As the Microsoft (MSFT) share chart shows:
→ yesterday’s candle closed below $460 — the lowest level since early June last year;
→ the decline from the all-time high near $550 has exceeded 16%.

Why MSFT Shares Are Falling

The downward move may reflect a shift in market sentiment from AI-driven euphoria to a more sober reassessment of the actual returns on investment. Investors are locking in profits amid concerns that the company’s current infrastructure spending may not pay off in the near term.

Concerns have been reinforced by media reports of:
→ disappointing sales momentum for its AI products (Microsoft 365 Copilot);
→ intensifying competition, including from Google Gemini and Amazon AWS;
→ rising capital expenditure (forecast at more than $80bn per year).

Technical Analysis of Microsoft (MSFT) Shares

From a long-term perspective, the share price continues to move within a key ascending channel. In this context:

→ the lower boundary acted as support in April 2025;

→ the upper boundary has served as resistance. The orange arrows highlight aggressive selling pressure whenever the price moves beyond it. The black arrow points to rising volumes during the price decline in early November — a bearish signal following overbought conditions;

→ the QH line, which divides the upper half of the channel into two parts, has switched from support to resistance near the psychological $500 level;

→ the current price has fallen towards the channel’s median, where supply and demand typically come into balance (marked by the blue arrow).

In light of the above, it is reasonable to assume that the market may find an equilibrium that could persist until 28 January, when the quarterly earnings report is scheduled for release.

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