Microsoft Consolidates After Surprise Earnings Beat
Microsoft (MSFT) has been moving sideways after a strong run-up in July following its surprise earnings beat. This consolidation phase is seen as a bullish sign, allowing the stock to fortify its trend. Higher highs and higher lows define Microsoft's move, which is now considered bullish despite bearish indicators that have slowed down from their fever pace in August.
The money flow remains positive, and the price action is constructive, but the candles are turning amber in color, indicating a neutral phase. The previous momentum has cooled off, partly due to the uncertainty surrounding Microsoft's AI initiatives, growth prospects, and its place in the software market. In comparison, competitor Oracle (ORCL) rallied last week but gave back all of its gains as it struggles with its own AI efforts.
With earnings season approaching and the end of the third quarter of 2026 nearing, momentum is expected to return to leading stocks like Microsoft, which will set leadership in motion. TheStreet Pro Portfolio currently rates MSFT a Two, or 'stockpile on pullbacks', indicating confidence in its long-term prospects.