Microsoft (MSFT) Stock Soars in 2025 Without TikTok Acquisition, Trading at $310

Microsoft Corporation (MSFT), a cornerstone of the Dow Jones Industrial Average, is currently evaluating the potential acquisition of TikTok’s operations in the U.S., Australia, and New Zealand, with a decisive deadline set for September 15, 2024. However, the deal faces significant challenges, including resistance from Chinese authorities and competing bids from other interested parties. Industry insiders, including co-founder Bill Gates, have expressed skepticism about the acquisition, likening it to a "poisoned chalice" similar to Microsoft’s troubled LinkedIn purchase in 2016.

Key Insights

• Bill Gates warns of risks associated with the TikTok acquisition, calling it a "poisoned chalice."
• Microsoft’s stock is poised for continued long-term growth, regardless of the deal’s outcome.
• Some investors are beginning to reduce their holdings amid uncertainty.

Microsoft’s ambition to expand its presence in social media is clear, yet the company’s core business remains robust, having demonstrated remarkable resilience and growth throughout the global pandemic. The stock has rewarded shareholders handsomely with a 32% gain year-to-date, recently hitting all-time highs near $310 per share. Unlike competitors such as Facebook and Twitter, Microsoft has largely avoided political controversies that have unsettled the social media landscape.

For investors who have been waiting on the sidelines, a potential retreat from the TikTok acquisition could present an attractive buying opportunity, especially if the market reacts negatively to the news. While short-term speculative investors might exit, Microsoft’s proven track record over the past four years suggests the stock is well-positioned to reach new heights, provided the company avoids risky acquisitions that could hamper its momentum.

Investment Tip

Speculation involves engaging in financial transactions that carry significant risk but also offer the potential for substantial rewards. Investors should weigh the risks carefully against the possible gains when considering speculative moves.

Microsoft Long-Term Stock Performance (1999 – 2024)

Microsoft’s multi-decade growth trajectory saw a peak at a split-adjusted $59.97 in December 1999, followed by a prolonged downturn that bottomed out in the upper teens. The stock struggled through much of the mid-2000s, breaking resistance around $30 in 2007 before succumbing to the 2008 financial crisis. Recovery took several years, with the stock doubling by 2011 to reclaim previous highs. Momentum accelerated post-2016, with the price nearing its 1999 peak before surging past it after the 2016 U.S. presidential election, supported by strong retail and institutional interest.

By early 2020, MSFT reached a high of $190.70 before a significant market selloff amid global uncertainty. The stock rebounded sharply, forming a V-shaped recovery and continuing its bullish trend into 2024.

Microsoft Short-Term Stock Trends (2018 – 2024)

The stock’s recovery from early 2020 followed a classic V-shaped pattern, culminating in a cup-and-handle breakout that propelled MSFT to record highs above $310 in August 2024. However, recent trading shows signs of consolidation, with support holding near the 50-day exponential moving average (EMA) at approximately $298. On-balance volume (OBV) metrics indicate profit-taking among shareholders, suggesting a potential short-term dip that could offer entry points for new investors.

Technical Analysis Tip

The cup-and-handle pattern is a bullish technical formation characterized by a rounded "U" shape (the cup) followed by a smaller consolidation (the handle). This pattern typically signals a continuation of an upward trend, often accompanied by lower trading volumes during the handle phase.

Conclusion

Despite ongoing negotiations to acquire TikTok’s U.S. operations, Microsoft’s stock performance reveals mixed investor sentiment, with some profit-taking occurring beneath the surface. Regardless of the acquisition’s outcome, MSFT remains a solid long-term investment with strong growth prospects in 2024 and beyond.

Disclosure: The author holds no positions in Microsoft or related securities at the time of writing.

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