Analyst explains why Microsoft is ‘a generational buying opportunity’

Although Microsoft (NASDAQ: MSFT) is down more than 20% so far in 2026, more and more analysts are growing bullish on the tech company.

The most recent sign of potential momentum reversal appeared on Microsoft’s daily chart on Wednesday, March 25, when the stock tested its 200-day simple moving average (SMA), a metric widely viewed as a key long-term trend indicator, as it balances out daily volatility and serves as a reference point for many institutional investors. 

This has happened only three times over the past decade, and each time, the stock experienced a rally. For example, following the setup in early January 2023, it shot up more than 60% by the end of the year.

Considering MSFT shares are down 31% from their all-time highs, and considering that they are trading at their lowest valuation since 2018, with its relative strength index (RSI) close to levels recorded in 2008, the analyst known as Mike Investing believes the setup means that Microsoft is now ‘a generational buy opportunity.’

Microsoft’s 200-day SMA gap widest since 2008 financial crisis

While the market has not been fair to equities in general in 2026, the past two weeks have been especially rough for Microsoft. As mentioned, the distance between its latest closing price and its 200-day moving average is the largest gap since the 2008 financial crisis, when it reached roughly 51%.

In recent months, Microsoft has faced additional pressure as technology stocks broadly pulled back amid concerns about stretched valuations, heavy capital spending, and uncertainty around how quickly artificial intelligence (AI) investments will translate into returns.

Microsoft, meanwhile, has been ramping up its own in-house AI capabilities and restructuring parts of its AI division. While the plan has not been met with universal optimism (Melius Research finds the reorganization “a red flag”), it nonetheless signals an operational shift in a key business area and thus a potential reversal on the charts.

In addition to many retail investors, who view the weakness as a potential long-term entry point, institutional analysts also find the stock promising. Bank of America recently reinstated coverage of Microsoft with a “Buy” rating and a $500 price target, expecting durable multi-year growth driven by Microsoft’s cloud and AI businesses.

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