Microsoft’s stock (MSFT) is hitting a rough patch, with analysts sounding alarm bells over a possible 20% plunge, according to Wolfe Research’s latest take on March 5, 2025.
The firm’s charts show MSFT forming a “topping pattern” for months, and it’s now teetering on the edge—if the stock doesn’t break out soon, it could face a steep fall. After closing at $388 on Wednesday, MSFT lost the critical $400 support level, and Wolfe’s initial downside target of $385 is just a hair away. If it can’t hold there, analysts warn the stock could slide to $315–$335, a drop that’d wipe out a fifth of its value from current prices.
Adding to the gloom, MSFT just triggered a “death cross” for the first time in nearly a decade, a bearish signal where the 50-day moving average dips below the 200-day moving average, now sloping downward. That pattern’s got traders nervous—it’s historically meant trouble for stocks, pointing to more downside ahead. The selloff’s part of a broader slump in AI-related stocks, and Microsoft’s recent earnings haven’t helped.
Its Q1 2025 report showed solid AI growth, but monetization’s lagging, and investors are jittery about its OpenAI partnership after Chinese AI startup DeepSeek started grabbing headlines. Some see Microsoft’s big AI bets as risky, pulling focus from its core businesses and spooking shareholders.
Still, not everyone’s throwing in the towel. Some market watchers are optimistic about MSFT’s 2025 outlook, pointing to its potential in quantum computing and other cutting-edge fields. Analysts polled by CNN give it a median price target of $501, a 28% jump from where it sits now.
With shares trading below 27 times forward earnings, a few see this dip as a buying opportunity. But Wolfe’s technical warning hangs heavy—if Microsoft can’t steady above key levels, the stock’s got a bumpy road ahead. It’s a head-scratcher for investors: buy the dip or brace for more pain? For now, Microsoft’s got to “make a stand here” or risk a nasty tumble.
