One of the "Magnificent Seven" stocks, Dow Jones component Microsoft is out of buy range past an early buy trigger. But MSFT stock also is approaching a new entry amid a potential nine-day win streak.
The software giant is part of the flagship IBD 50 list of leading growth stocks. Microsoft also is part of the IBD Long Term Leaders list, reflecting the reliable earnings growth that makes a stock a good candidate for buying on a pullback.
On Oct. 24, the Dow Jones leader crushed Wall Street's targets for its fiscal first quarter thanks to a strong cloud-computing business. It also raised its outlook for the current quarter. In response, shares rallied more than 3%.
The Redmond, Wash.-based company earned $2.99 a share on sales of $56.5 billion in the quarter ended Sept. 30. Analysts polled by FactSet had expected Microsoft earnings of $2.65 a share on sales of $54.5 billion. On a year-over-year basis, Microsoft earnings increased 27% while sales climbed 13%.
MSFT stock has seen accelerating earnings growth over the past three quarters — from 10% to 21% to the 27% reported in the latest quarter.
With powerful gains since January 2023 and strong fundamentals, Microsoft boasts a strong IBD Composite Rating of 97 out of 99, according to IBD Stock Checkup.
Dow Jones Leaders: MSFT Stock Eyes Latest Buy Point
On Nov. 1, Microsoft shares broke out past a double bottom's 340.86 buy point. Meanwhile, another chart interpretation shows MSFT forming cup base with a 366.78 buy point, according to IBD MarketSmith chart analysis.
MSFT stock inched lower Thursday, trading around 363.
The stock's base boasts a number of strong metrics, including a strong up/down volume ratio and an RS line at new highs.
A greater than 1.0 up/down volume ratio signifies institutional accumulation over the past 50 trading sessions. And a robust RS line indicates big stock market outperformance vs. the S&P 500.
For MSFT stock, an RS line at new highs is an especially powerful indicator to watch during the early stages of a new uptrend.
Be sure to follow Scott Lehtonen on X, formerly known as Twitter, at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
