$MSFT Rebound rally from old Cloud Chart support zones gaining momentum. Standard Line & Turning Line of the Cloud Chart next upside targets when MSFT gets past old Cloud resistance zone now!
StarMine data review:
Based on the most recent financial data and StarMine quantitative models as of February 2026, Microsoft (MSFT) presents a complex profile: a "fundamentally elite" company currently facing a "momentum reset" following its latest earnings report.
The following review breaks down MSFT's performance through the core StarMine lenses.
1. Analyst Revisions (ARM) & SmartEstimates
StarMine’s SmartEstimates (which give more weight to the most accurate and recent analysts) were highly predictive for Microsoft's Q2 2026 results (reported Jan 28, 2026).
The Beat: MSFT reported a Non-GAAP EPS of $4.14, beating the consensus of $3.93. This validated StarMine’s "Predicted Surprise" signals, which often flag MSFT for positive revisions.
The Outlook: Despite the beat, the ARM score has softened slightly because, while revenue guidance for Q3 ($80.65B–$81.75B) remains strong, it did not significantly exceed high-end analyst expectations, leading to some "stale" estimates being revised downward.
2. Valuation: Intrinsic vs. Relative
StarMine differentiates between Relative Valuation (RV) (how it trades vs. peers) and Intrinsic Valuation (IV) (based on forward cash flows).
Intrinsic Value: MSFT continues to score highly here. With Microsoft Cloud (Azure) now exceeding a $50 billion quarterly run rate, the StarMine IV model suggests the company’s long-term cash flow generation remains robust, even with massive $37.5 billion quarterly CapEx on AI infrastructure.
Relative Value: The score is lower here. At a P/E ratio of approximately 27x, MSFT is "cheaper" than it was in late 2025, but it still trades at a significant premium to the broader software sector, which StarMine flags as a potential headwind if AI growth doesn't accelerate.
3. Momentum: Price vs. Value
This is currently the most volatile part of the MSFT profile.
Price Momentum: Following the Jan 28 earnings report, the stock saw a ~10% post-market dip. This has pushed the Price Momentum score into the bottom half of its 52-week range.
Value Momentum (Val-Mo): Interestingly, the StarMine Val-Mo model may actually see this as a "buy the dip" opportunity. Because the fundamental earnings (Value) improved while the price fell (Momentum), MSFT is moving into a quadrant that historically attracts "smart money" looking for high-quality entries.
4. Credit Risk & Smart Holdings
Structural Credit Risk: MSFT maintains one of the highest possible scores. Its massive cash reserves and 24% YoY EPS growth mean its default risk is negligible.
Smart Holdings: This model tracks where institutional "smart money" is moving. Currently, there is a slight rotation. While long-term institutions remain "overweight," the model shows some trimming by momentum-based funds concerned about the "tokens per watt per dollar" efficiency of recent AI investments.
Summary Table: StarMine Snapshots (Est. Feb 2026)
| Model Component | Score Trend | Key Driver |
| SmartEstimates | High | Consistent history of beating EPS/Revenue targets. |
| Analyst Revisions | Neutral | Guidance was "good enough" but not "blown out." |
| Price Momentum | Low | Recent 10% pullback following margin concerns. |
| Credit Strength | Max | $81.3B revenue and elite balance sheet. |
Note: The market's recent negative reaction was largely due to operating margins (45.1%) coming in slightly below the 45.5% consensus. StarMine models suggest this is a "Capex-heavy" phase rather than a fundamental decline in the business model.
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