Microsoft (MSFT) Shares Drop 11%: Is This a Buying Opportunity or Time to Exit?

On April 18, 2025, Microsoft Corporation (NASDAQ: MSFT) experienced a significant 11% decline in its stock price, sparking debates among investors about whether this presents a strategic entry point or signals deeper underlying issues. The sudden drop has prompted analysts to reevaluate the tech giant’s near-term growth prospects, particularly in its cloud computing (Azure) and AI divisions. Market sentiment appears divided, with bulls citing strong fundamentals and bears pointing to potential macroeconomic headwinds. Institutional investors are closely monitoring key support levels while retail traders assess the risk-reward ratio. This volatility comes amid broader sector rotation and could represent either a temporary correction or the start of a larger trend reversal for one of the world’s most valuable companies.

Microsoft Price Predictions Revised: Now’s the Time to Buy or Sell?

Analysts at Bank of America recently revised their stock forecast for Microsoft (MSFT), slashing previous expectations. “We are lowering revenue and operating income estimates across the software group to reflect heightened macro uncertainty,” BofA Securities analysts said in a client note.

The analyst team said first-quarter results are likely unaffected, given that tariff-related stress didn’t start until April.”The BofA economics team is not forecasting a recession at this point,” the report said. “However, we expect management teams to lower the outlook for Q2 and the remainder of calendar 2025 on a constant currency basis to reflect added uncertainty.” Analyst Brad Sills reiterated his buy rating on Microsoft stock but lowered his price target to 480 from 510.

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Additionally, Microsoft (MSFT) has recently gotten a price target cut and an outperform rating from Wedbush. Specifically, they note that their recent update was driven by ongoing economic challenges affecting the market as a whole.

Microsoft (MSFT) stock currently sits around $371. MSFT is trading near the bottom of its 52-week range and below its 200-day simple moving average. Most analysts suggest buying the stock now, anticipating a climb to north of $450 in the coming months.

Now, the question is, will things turn around for the Windows developer? Microsoft has emerged as one of the leaders in artificial intelligence over the last year. The firm made waves when it became an early investor in ChatGPT developer OpenAI, and that has paid off massively. Moreover, its AI investment has fueled success in its cloud sector. The company has seen its cloud revenue increase 20% to $24 billion in Q1, according to a recent report. These factors could point Microsoft and MSFT stock in the right direction in the remainder of 2025.