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Microsoft Corp. (NASDAQ:MSFT) stock traded higher Friday as a broad market rally lifted large-cap technology stocks.
Microsoft gained about 0.4%, while the Nasdaq rose 1.23% and the S&P 500 climbed 1.11%. The technology sector led the market with a 1.77% gain.
Separately, Microsoft is planning a major expansion of its global data center network as strong AI and cloud demand strains its available computing capacity.
Microsoft aims to increase data center capacity to more than 38 gigawatts by 2032 from about 12 gigawatts currently, Bloomberg reported Friday, citing people familiar with the plans.
Computing shortages have forced Microsoft to restrict some new cloud subscriptions and have pushed certain customers toward rivals, according to the report.
Microsoft's latest fiscal-year capital spending reached $145 billion as the company invested heavily in infrastructure. However, a Microsoft spokesperson told Bloomberg that the reported capacity projections were inaccurate and did not provide alternative figures.
The company currently has about 2 gigawatts of capacity focused on AI-specific chips. That could account for roughly one-third of the reported 38-gigawatt footprint by 2032.
Microsoft is also bringing new capacity online near Atlanta as it works to ease pressure on its existing data center network.
MSFT shares are down about 0.9% over the past 12 months. As a result, traders may focus on whether the stock can hold key moving averages and break through nearby resistance.
The stock is hovering near its short-term trend line. It is about 0.4% above its 20-day simple moving average of $494.47.
The longer-term trend remains stronger. MSFT is 9.5% above its 50-day SMA of $453.68. It is also about 15% above its 100-day and 200-day averages of $430.98 and $431.26, respectively.
However, momentum has cooled. The MACD is below its signal line, while the histogram is negative. That could signal consolidation following the stock's previous advance.
The broader trend remains constructive. The 20-day SMA is above the 50-day SMA. MSFT also formed a golden cross in August when its 50-day average moved above the 200-day average.
Key resistance sits near $513.50. Support is around $477. A break below that level could shift attention toward the 50-day SMA.
MSFT trades at about 27.4 times earnings. The stock carries a Buy consensus rating with an average price forecast of $559.60.
Stifel recently maintained a Hold rating and raised its price forecast to $530. Bank of America maintained a Buy rating and lifted its forecast to $600. Wells Fargo maintained an Overweight rating and raised its forecast to $700.
Microsoft's MarketDash Edge rankings point to strong growth and quality, but weaker value.
The stock scores 96.89 for Growth, 86.36 for Quality and 77.35 for Momentum. Its Value score stands at 23.52.
The combination suggests Microsoft retains strong growth characteristics. However, its premium valuation could limit upside if growth expectations weaken.
Microsoft has significant weightings in several major technology and growth ETFs.
The Technology Select Sector SPDR Fund (NYSE:XLK) has a 9.91% Microsoft weighting. The iShares Core S&P U.S. Growth ETF (NASDAQ:IUSG) has a 9.45% weighting, while the iShares Expanded Tech-Software Sector ETF (BATS:IGV) has a 9.42% weighting.
That exposure means large ETF inflows or outflows can contribute to buying or selling pressure in Microsoft shares.
Microsoft shares were up 0.39% at $494.35 at the time of publication Friday, according to market data.
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