Don’t Buy into the Microsoft Rally Just Yet

Don’t Buy into the Microsoft Rally Just Yet

Microsoft (SYM: MSFT) is still racing higher.

All after Citi analysts reiterated a buy rating, with a price target of $520. The firm is even more bullish on MSFT on news surrounding generative AI startup AI.

“Recent media reports indicate that OpenAI has more than doubled its annualized revenue to $3.4B. The company has also signed a deal with Oracle (ORCL) to expand its cloud capacity, both of which Citi analyst Tyler Radke said are “positive from a growth perspective” and suggest strength in Azure,” as noted by Seeking Alpha.

However, we wouldn’t rush to buy the Microsoft stock just yet.

Technically stretched at $449, it’s overbought on RSI, MACD and Williams’ %R. In fact, if you pull up a two-year chart with those indicators, you’ll see that when all three agree, the stock pulls back, sometimes just slightly. We saw it happen in May, January, November 2023, July 2023, April 2023, February 2023, and in August 2022.

Once MSFT sees a healthy pullback, then it’ll be worth buying on the AI boom.

Related Reading: 3 Factors For Getting Wealthy With A.I. Stocks

Many American investors are going to try to grow wealthy by investing in A.I. stocks.

Unfortunately, they are going to lose money.

Here’s why…

Think back to the tech bubble in 2000. It burst, and investors lost millions. Average Americans watched their portfolio get murdered.

The same pattern repeated itself in crypto. Innocent investors lost everything.

Mark my words…

The same will happen with A.I.

However, massive gains could also be made.

The key is to choose wisely… and follow these 3 factors.

When you do, you can avoid the A.I. stocks that will go nowhere… and you’ll be able to identify the winners.

Click here to discover the 3 factors for getting wealthy with A.I. stocks.

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