Microsoft stock price rose for the second successive session on Thursday, gaining 0.2% and trading at $388 at the time of writing. The stock has renewed energy following the Federal Reserve’s decision to retain interest rates at 4.25%-4.50%. In addition there is renewed optimism over AI growth in 2025 following Nvidia CEO Jensen Huang’s optimistic outlook at the company’s GTC conference.
According to Huang, DeepSeek’s phenomenal entry in the market actually makes a strong case for increased investment in high-end AI chips. In a speech delivered on Tuesday, Huang added that DeepSeek’s reasoning model needs 100X more computing power. On the other hand, high-end chips need less power, underlining their status in the AI tech revolution.
Microsoft (NASDAQ: MSFT) has been one of the leading buyers of Nvidia’s high-end chips, and plans $80 billion AI capex in 2025. Doubts over the trajectory of AI technology had recently permeated the markets. However, a readjustment of expectations linked to DeepSeek’s impact has restored investor confidence in mega spending by top tech companies like Microsoft.
The company’s large AI capex at the onset is likely to give it an edge over competitors. In addition, it is likely to scale down expenditure significantly from 2026. This augurs well for Microsoft stock price in the medium and long term. Meanwhile, the company plans to set up three data centers in Malaysia in 2025, pointing to a focus on new markets.
Microsoft Stock Price Prediction
Microsoft stock price will keep rising if the action stays above the pivot mark at $385. With the buyers in control, the first barrier will likely be at $392. Breaking above that level will signal a stronger momentum which could potentially take the stock higher to test $398.
Conversely, the momentum will shift to the downside if MSFT price goes below $385. In that case, the stock is likely to find the first support at $380. Further control by the buyers will break below that level and invalidate the upside narrative. Also, that could result in an extended decline to test $375.
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