Microsoft Corp.'s Xbox division is preparing significant layoffs and budget cuts next month as new CEO Asha Sharma moves to overhaul the gaming business amid declining revenue and profitability. The restructuring efforts are expected to commence shortly after Microsoft's fiscal year ends on June 30. Xbox plans to reduce spending on marketing and other areas to improve margins, according to a report by Bloomberg News.

Studio Closures and Spin-offs

Several studios in Microsoft Corp.'s Xbox gaming division, including Compulsion Games and Double Fine, are in active negotiations to spin off from the company. These discussions are part of the broader cost-cutting measures and strategic realignment under new leadership. The potential closures and spin-offs aim to streamline operations and focus resources on high-performing assets.

Copilot Adoption Drives Analyst Optimism

Despite the challenges in the gaming unit, BNP Paribas reiterated Microsoft as a top AI software and cloud infrastructure pick. Analyst Stefan Slowinski highlighted accelerating Copilot adoption, expanding enterprise deployments, and a potential evolution toward a higher-value seat-plus-consumption pricing model. Following investor meetings with management, Slowinski indicated Microsoft could exceed its outlook for more than 25 million Copilot seats in the fiscal fourth quarter. This growth is supported by stronger customer usage, product improvements, and large-scale rollouts such as NHS England's 500,000-seat deployment.

Analyst Ratings and Price Targets

BNP Paribas maintained its Outperform rating and $555 price forecast on Microsoft shares, implying roughly 40% upside from recent levels. The stock carries a Buy rating with an average price forecast of $560.00. Recent analyst actions include:

Technical Analysis and Market Performance

Microsoft is trading 7.7% below its 20-day SMA ($421.43) and 14.5% below its 200-day SMA ($454.86), keeping the longer-term trend tilted lower. The stock is also 5% to 6% below its 50-day and 100-day averages. Momentum indicators suggest fading upside pressure, with the MACD below its signal line and a negative histogram. Key resistance stands at $433.00, while key support is located at $381.50. Microsoft shares were down 2.71% at $386.61 at the time of publication on Thursday.

Microsoft Corp stock gained on Monday as investors favored artificial intelligence-related technology stocks during a broad market rally. The company's shares rose alongside major U.S. indexes, with the tech-heavy Nasdaq gaining 2.68% and the S&P 500 rising 1.55%. The Dow Jones Industrial Average gained 1.08%, and the Russell 2000 climbed 1.23%. This market movement followed President Donald Trump's announcement of a peace agreement with Iran, which pushed crude oil prices lower and improved sentiment toward growth stocks.

Market Rally Lifts Microsoft

Microsoft traded higher as major U.S. indexes advanced. The rally was driven by improved sentiment toward growth stocks following geopolitical developments. The tech sector, particularly artificial intelligence-related companies, saw significant investor interest.

Technical Setup Still Needs Repair

Despite Monday's bounce, Microsoft remained in a longer-term repair phase. The stock was down 16.76% over the past 12 months and traded below every major moving average. Microsoft traded about 5% below its 20-day simple moving average and about 12% below its 200-day simple moving average. The 20-day simple moving average remained above the 50-day simple moving average, signaling some near-term improvement. However, the death cross from January, when the 50-day moving average fell below the 200-day average, continued to keep the broader trend under pressure.

Momentum Remains Cautious

Microsoft's MACD remained below its signal line, and the histogram stayed negative, suggesting upside momentum was cooling unless buyers could rebuild trend strength. In plain terms, the setup suggests the latest rebound still needs follow-through to confirm a stronger trend.

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the July 29, 2026 (estimated) earnings report. Analysts have provided the following estimates:

Top ETF Exposure

Microsoft holds significant weight in several major ETFs, which means any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

Price Action

Microsoft shares were up 2.71% at $401.34 at the time of publication on Monday.