Will Microsoft face antitrust issues on its cloud unit?


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Microsoft (NASDAQ:MSFT) may come under pressure from European regulators in the future. The company is said to have come under particular scrutiny following a complaint about anti-competitive behavior involving its cloud unit, Azure. While Microsoft has largely managed to stay out of the antitrust spotlight over the past few years, MSFT’s actions could now be embroiled in that discussion.

Microsoft peers – like Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGLNASDAQ:GOOG), Meta (NASDAQ:Facebook) and Amazon (NASDAQ:AMZN) — have been subject to antitrust scrutiny both here in the United States and in Europe. While Microsoft may have avoided the political chants calling for a break from big tech, this development now sees the company integrating with other big tech names.

The problem?

Microsoft is would have combining Office and Windows to distance customers from other big cloud companies like Google Cloud and Amazon Web Services. While it doesn’t sound like a big deal, critics liken it to Microsoft’s antitrust troubles of the early 2000s, when it used similar business practices.

Trying to get ahead of the game, Microsoft President Brad Smith commented on the issue, saying, “While not all of these claims are valid, some are, and we will absolutely be making changes soon to address them.”

MSFT Stock Chart

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Source: Graphic courtesy of trend spider

Looking at the chart, we will note that MSFT stock has seen a strong rally from the March lows. At the same time, which tech stock has failed?

Stocks couldn’t quite rally to the 61.8% retracement of the overall correction, which is disappointing. But even more disappointing is the stock’s inability to maintain its major moving averages. Worse still, MSFT stock could not hold the short-term 61.8% retracement on the downside (the red retracements).

Where does this lead us now? It is entirely possible that we will see a rebound from oversold in the tech space. If this materializes, the gap fill level near $296.25 could be in play, as well as the decline in the 10-day moving average.

Above it could bring $300 and the 200-day moving average into play.

On the other hand, keep an eye out for this week’s low near $280.50. A break of this level could open the door to the $270-$275 zone and the rising 21-month moving average. If MSFT stock dips in this zone, bulls can likely look for a bounce, even if only in the short term.

As of the date of publication, Bret Kenwell had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Bret Kenwell is the director and author of Future Blue Chips and is on Twitter @BretKenwell.

Bret Kenwell is the director and author of Future Blue Chips and is on Twitter @BretKenwell.

The post office Will Microsoft face antitrust issues on its cloud unit? appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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