Microsoft Vs. Amazon: Stock Charts Signal Trouble, But Wall Street Sees AI-Fueled Growth

As Microsoft Corp MSFT and Amazon.com Inc AMZN head for a potential Death Cross on their stock charts, a fierce competition between the two tech giants rages on.

Both companies are not only navigating stock market signals but also making significant strides in AI, shareholder returns, and strategic investments. Let's break down how they stack up.

Microsoft: AI Powerhouse, Shareholder Darling

Microsoft's stock might be teasing a death cross—a bearish technical indicator—but Wall Street analysts are anything but bearish. KeyBanc Capital Markets has maintained its Overweight rating on Microsoft with a sky-high price target of $490. This confidence is driven by Microsoft's explosive growth in AI, with a 60% quarter-over-quarter increase in Copilot AI customers and a big deployment with Vodafone VOD.

Beyond AI, Microsoft is showing serious love to its shareholders. The tech titan announced a 10% dividend hike, raising the payout to $0.83 per share, and introduced a new $60 billion share repurchase program. This comes as the previous $60 billion buyback program from 2021 wraps up.

Microsoft's mix of strategic buybacks and increased dividends suggests it's on a mission to keep shareholders hooked while riding the AI wave.

Amazon: Leaner, Meaner, AI-Driven

Amazon, meanwhile, is in the midst of a major transformation. BofA Securities analyst Justin Post has reiterated his Buy rating on Amazon with a $210 price target, betting on CEO Andy Jassy's vision for a slimmer, more efficient company.

By the end of first quarter of 2025, Amazon is expected to save $700 million annually through streamlining its workforce, reducing management layers, and enforcing a return-to-office mandate.

But the real ace up Amazon's sleeve is AWS (Amazon Web Services). Amazon's multi-billion-dollar co-investment with Intel Corp INTC in custom AI chips is set to give AWS a competitive edge in the ever-expanding AI landscape.

With the AI arms race heating up, Amazon's bet on Intel's cutting-edge 18A chips positions AWS to tap into broad-based AI demand.

The Technical Showdown: Death Cross Ahead?

While both Microsoft and Amazon stock are experiencing slight buying pressure and bullish momentum, the looming death cross—the point where the 50-day moving average dips below the 200-day moving average—casts a shadow over their technical outlooks.

Chart created using Benzinga Pro

For Microsoft stock, the price remains above key moving averages, with its 50-day SMA at $423.17.

Chart created using Benzinga Pro

Similarly, Amazon stock’s price is above its key averages.

Although these signals typically point to strength, the impending death cross hints at potential turbulence ahead for both.

Who's Winning?

In the AI arena, both companies are playing to their strengths: Microsoft with its rapidly expanding Copilot initiative and Amazon with its AWS dominance.

However, Microsoft's aggressive shareholder-focused moves, including the buyback and dividend boost, may give it the edge for now.

On the other hand, Amazon's operational streamlining could position it for stronger long-term growth, especially as it optimizes its workforce and fortifies AWS with custom AI chips.

As the battle heats up and the death cross approaches, Wall Street remains bullish, but cautious investors might want to keep a close eye on the charts.

Read Next:

• Amazon Vs. Disney: The E-Commerce Titan Takes On Mickey In Streaming Wars

Photo: Shutterstock