--- title: "MSFT has dropped 22%, let me share my thoughts" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40131052.md" description: "I've been paying attention to $Microsoft(MSFT.US) MSFT recently. Today, I'll chat with you all about it, stating the conclusion first before breaking down the process. I've been a bit focused on this stock lately, and it started with a rather "counterintuitive" number: it has fallen 22% from its all-time high. What does 22% mean? For any growth stock, that's a drop significant enough to discuss whether "it has bottomed out." But for a behemoth like MSFT, which hardly moves in a year, a 22% drop equals a major pullback that only occurs once every few years. So, my first reaction wasn't to look at the charts; it was to check when the earnings report is due—April 29th..." datetime: "2026-04-23T10:18:32.000Z" locales: - [en](https://longbridge.com/en/topics/40131052.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40131052.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40131052.md) author: "[好柿花生Option](https://longbridge.com/en/profiles/27346521.md)" --- # MSFT has dropped 22%, let me share my thoughts I've been paying attention to $Microsoft(MSFT.US) MSFT recently. Today I'll chat a bit with everyone, stating the conclusion first before breaking down the process. I've been a bit interested in this stock lately, triggered by a very "counter-intuitive" number: it's down 22% from its all-time high. What does 22% mean? For any growth stock, it's a magnitude that allows discussion of "whether it has bottomed out." But for a behemoth like MSFT that hardly fluctuates in a year, 22% equals a major pullback that only occurs once every several years. So my first reaction wasn't to look at the chart; it was to pull up the earnings date—April 29, which is 6 trading days away. This timing is crucial because earnings are both a risk and a catalyst. Focusing on a stock with a large drop and approaching earnings offers a larger strategic window than usual. Next, I did two things. The first was to trace back how that high-volume bullish candle on April 16 came about. That day, Satya Nadella announced that the Fairweather data center in Wisconsin was put into production ahead of schedule. The market rose a bit that day but was quickly overshadowed by the overall AI sector sentiment and fell back. What I'm thinking is, what does the early launch of the data center mean? Direct translation: Azure's AI computing power bottleneck eases earlier, meaning the actual pace of AI revenue realization can be moved forward by a quarter. This itself is solid, but the market hasn't fully digested it since that day—many saw it as a hot topic that day, not as a timeline shift on a fundamental mainline. The second thing was to look at the positioning on the options side. The OI Put/Call Ratio is 0.47. This isn't the sentiment of one or two large orders; it's a structural bullish bias accumulated from all open interest. Generally, I pay attention when this ratio is below 0.7, and I start looking seriously when it's below 0.5. It's now 0.47, meaning the entire options market's judgment on the future is clearly bullish. Looking at the April 29 earnings date in conjunction with the PC Ratio, the capital's game intention becomes clearer—they're waiting for the earnings catalyst. Originally, my first reaction was to go naked call—simple and crude, betting on an earnings rebound. But I quickly talked myself out of it because the biggest enemy of a naked call before earnings isn't direction; it's IV crush. For a stock like MSFT, IV gets pushed relatively high before earnings. Even if the direction is right after earnings, IV will be halved, and the premium will evaporate anyway. I got burned like this on another stock last time; that kind of loss is the worst. So I finally chose the more conservative Bull Call Spread structure: Buy $385 Call, Sell $405 Call, expiring May 16, 23 calendar days. Choosing the May 16 expiry has two reasons. First, it crosses over the week of April 29 earnings, incorporating that earnings candle. Second, it doesn't drag on too long, so time value isn't worn down too much. Choosing the $385-$405 range is because $370 is the recent bottoming area, $385 is the first meaningful resistance level moving up from the bottom, and looking up to $405 basically corresponds to the upper edge of the gap around earnings. I'm not greedy for the $420, $430 levels above because unless earnings are explosively beyond expectations, those levels can't be reached in a month. Cost estimate is roughly: maximum loss about $780 per spread (the net premium paid), maximum profit about $1220 per spread. The risk-reward ratio is about 1.56:1. The specific premium is subject to the real-time quote at order placement; I don't dare to lock in a number while writing this, as intraday fluctuations of two or three percentage points are common. I set the stop-loss at $368. This level is one notch below the recent bottoming area. Breaking it means my judgment of "bottoming completed" is wrong. If triggered, I'll cut half the position, leaving the other half to continue with the original plan—this isn't wishful thinking about breaking even; it's giving myself some leeway "in case it's a false breakout." If it doesn't recover within two days after the breakout, I'll clear the remaining half as well. **Finally, a note: many ask me why not wait until after earnings to confirm the direction before entering. The answer is—entering after earnings only gets you the tail end of the move. Entering at this current position captures the market's repricing premium for "earnings + catalyst." Both approaches are valid; which one you choose depends on your own personality.** ### Related Stocks - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) ## Comments (2) - **顺势而为 Go · 2026-04-23T16:33:40.000Z**: Written by AI, the tone is a bit 😂 - **leo zhao · 2026-04-23T11:51:57.000Z**: Veteran