Microsoft Hits Record High Amid Strong Tech Sector Momentum: What's Going On?
Microsoft shares reached a record high of $469.65, closing at $467.68, driven by strong momentum in the tech sector, particularly in AI and cloud computing. Despite a BofA survey indicating modest declines in software growth expectations for 2025 and 2026, spending is expected to grow nearly 10% annually. Nearly 80% of S&P 500 firms exceeded Q1 profit expectations, with Microsoft among the top performers. Analysts caution that valuations are stretched, yet investors favor companies with strong AI-driven growth.
Microsoft Corp MSFT shares surged to a new all-time high of $469.65 on Thursday before closing up 0.82% at $467.68, despite no company-specific news. The rally comes as broader market trends continue to favor mega-cap tech stocks, especially those leading in artificial intelligence and cloud computing.
What To Know: A recent software spending survey by BofA Securities analyst Brad Sills signaled modest declines in software growth expectations for 2025 and 2026, citing macroeconomic uncertainties.
Still, spending is projected to grow nearly 10% annually, with data analytics, cloud communications and security remaining top priorities. Microsoft, Snowflake and Datadog are seen as key beneficiaries in analytics, security and cloud infrastructure.
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Meanwhile, strong corporate earnings are fueling bullish sentiment. Nearly 80% of S&P 500 firms topped first-quarter expectations, delivering a 13.3% profit increase. Microsoft was among six of the Magnificent Seven to beat estimates, contributing to a collective $1.75 trillion market cap gain in May, the group's best month in years.
Analysts warn valuations are stretched, with Microsoft trading at a forward P/E near 27. But investors continue to reward firms with robust AI-driven growth and durable business models, positioning Microsoft as a leader in the next wave of tech innovation.
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Besides going to a brokerage platform to purchase a share — or fractional share — of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, Microsoft is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, MSFT has a 52-week high of $469.65 and a 52-week low of $344.79.
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