Microsoft Stock Forecast: Cash Out Your Huge Profit on Microsoft

motek 1The Microsoft stock forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • Microsoft’s stock was trading below $160 when I made my April 6 buy recommendation. I also gave it a price target of $205.
  • MSFT’s closing price last July 2 was $206.26 and its new record-setting 52-week high is 208.02.
  • A price return of more than 28% in two months is enough. Let us not be too greedy. Take your profit on Microsoft before the market takes it away.
  • The YTD gain of MSFT is now 29.80%. The stock is now fairly valued. I don’t think MSFT will do another +28% movement for the rest of 2020.
  • Microsoft’s decision to shutdown its retail stores and Mixer are commendable. It will help improve profitability.

The stock of Microsoft (MSFT) is now priced 28.8% higher than when I made my April 6 buy recommendation. MSFT has already fulfilled my old price target of $205. It is therefore high time for us to take our substantial capital gains on MSFT. Cash out all your MSFT position if you don’t like the 1% forward dividend yield of Microsoft. Going forward, the still ongoing pandemic could deliver a market correction which might lead to MSFT’s downside trend. 

Microsoft Stock Forecast - stock price
(Source: Seeking Alpha Premium)

The chart above shows the AI of Seeking Alpha’s Quant Rating System is still very bullish on MSFT. Seeking Alpha authors and Wall Street analysts are also bullish on MSFT. The predictive AI of I Know First is also slightly bullish for the one-year market trend of Microsoft’s stock. The average 1-year price target for MSFT at TipRanks is just $210.74. This convinced me that most Wall Street analysts believe MSFT is already peaking.

Microsoft Stock Forecast

Cashing out your profits on MSFT is the best thing to do right now. The staggering market rally since March is headed for a correction. There is still no approved cure or vaccine to the ongoing COVID-19 pandemic. I am fearless but sometimes I play safe. Take your profits on MSFT before the emotion of the stock market starts going pessimistic again.

MSFT Is Already Trading at Fair Valuation

I will only endorse MSFT as a buy again if it falls to $190-ish price levels. The recent rally of MSFT has made it fairly valued. It now has a higher forward GAAP P/E valuation than Apple (AAPL) and Alphabet (GOOG) – 35.95 vs 29.37 and 34.52. MSFT is a sell on profit taking motive right now because it is already trading under fair valuation. I mostly endorse stocks when they are relatively undervalued.

(Source: Seeking Alpha Premium)

The future of Microsoft’s ARM-based computer strategy is also now endangered by Apple’s decision to use its own ARM-based processors for its macOS computers. The in-house access/control over ARM-based processors for Mac computers means Apple’s products will outperform ARM-based Microsoft Surface computers. Going forward, Microsoft’s PC hardware campaign will again eat dust behind macOS.

Shutdown of Mixer and Retail Stores Means Slower Growth

Microsoft’s recent decision to shut down its streaming platform Mixer is likely due to its unprofitability. The same unprofitability logic is why Microsoft is closing its retail stores worldwide. These two moves will definitely improve profitability. However, the downside is that Microsoft has given up too soon. Mixer could have been a gold mine for its Bing Ads business. Mixer could have generated recurring premium subscription revenue.

Microsoft’s retail stores could have also achieved some measure of success. Just like how Apple has a wide network of retail stores for its Macs and iPhones, selling pricey Surface computers and phones still require physical evaluation from prospective buyers. I am afraid that Microsoft is again de-prioritizing its Surface-branded hardware products. Microsoft did not hesitate to close its retail stores. 

Without Mixer and Microsoft Stores, MSFT will probably continue to endure a 5-year revenue CAGR of less than 10%. The slow growth future of Microsoft is why we should not be too optimistic over MSFT right now. Let us wait if it will buy another company that could help it achieve double-digit revenue growth.

(Source: Seeking Alpha Premium)

I will immediately rate MSFT as a buy if it spends some of its $125.9 billion in total cash on a major acquisition. I will endorse MSFT as a very strong buy if it buys VMWare (VMW) or Adobe (ADBE). VMW or Adobe can further fortify MSFT’s leadership in SaaS. Going forward, Microsoft’s long-term prosperity will greatly rely on how long it can hold on to its leadership in SaaS. To achieve this, buying other SaaS firms like Adobe will ensure Microsoft keeps its throne for many years to come.

Microsoft’s leading 17% market in the fast-growing $101 billion SaaS industry is why MSFT is very profitable. Let us prioritize our own profitability. Let us cash out our profits on MSFT as soon as possible.

(Source: Seeking Alpha Premium)


My profit-taking sell recommendation for Microsoft does not mean I am no longer a believer. I still love Microsoft. I appreciate its enterprise SaaS and cloud computing industries’ leadership and very rich balance sheet. You can all hold on to your MSFT position for now if you feel like I’m jumping the gun too early. I am not infallible. MSFT might actually go beyond $210 because it is no longer wasting money on unprofitable ventures like Mixer and physical retail stores.

We can also pray that the current bull run lasts until end of August. This way blue-chip cloud computing-related stocks like MSFT continue to enjoy upward trends for the next 60 days.

Past I Know First Microsoft Stock Forecast Success

I Know First was successful with Microsoft stock forecast. On April 3 2020, the I Know First algorithm issued a bullish 3-month Microsoft stock forecast and the algorithm successfully forecasted the movement of the MSFT stock.  After 3 months, MSFT shares rose by 32.85% in line with the I Know First algorithm’s forecast. See chart below.

Microsoft Stock Forecast - past
1 year result

Here at I Know First, our algorithmic trading AI have modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing stock picking, for example machine learning stock prediction, aggressive stocks, top tech stocks as well as forex forecast and Apple stock news. Today, we are producing forecasts for over 10,500 assets, including commodity forecasts in our These forecasts generated by our quant trading tool are used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

This image has an empty alt attribute; its file name is google101-300x286-1.png

To subscribe today click here.

Please note-for trading decisions use the most recent forecast