MULTIDIMENSIONAL ANALYSIS OF MICROSOFT (MSFT): EXCEPTIONAL HISTORICAL GROWTH VS. RISK OF IMMINENT CORRECTION.

 

The measures of central tendency (mean, median, and mode) give us an idea of ​​the "typical" MSFT stock price during the study period:

The mean (153.06) and median (153.07) are virtually identical. This is a strong indicator that the stock price distribution is close to symmetrical. If the distribution were perfectly symmetrical (like a bell curve), the mean, median, and mode would coincide.

In this case, the mode (84.17) is significantly lower, implying that, although the highest and lowest prices are similarly distributed around the midpoint (median), the most frequent prices (mode) were concentrated at low values ​​at the beginning of the period.

The distribution has a slight positive or right skew (or almost zero due to the mean being roughly equal to the median), meaning there were more extreme values ​​(high prices) than low values. The histogram and its frequency polygon confirm this, as the highest frequency concentration is in the first interval (23.01–123.01), but the median (153.07) is much further to the right, indicating that for most of the period the stock price was higher than the most frequent price.

The standard deviation, 142.04, is a high measure of volatility or risk. It indicates that, on average, the stock price deviated by 142.04 monetary units from its average price (mean of 153.06).

The variance of 20,177.71, which corresponds to the square of the standard deviation, is used as a measure of data dispersion.

The range, 519.06, is the difference between the maximum price (542.07) and the minimum price (23.01). This confirms the large price variation over the 15 years.

The kurtosis value is −0.35. Kurtosis measures the degree of peakedness or flatness of a variable's distribution compared to a normal (mesokurtic) distribution.

If kurtosis > 0 (leptokurtic), the distribution is more peaked and has heavier "tails." If kurtosis = 0 (mesokurtic): Similar to a normal distribution, and if kurtosis < 0 (platykurtic), the distribution is flatter and has lighter "tails."

Positive kurtosis (leptokurtic) indicates that extreme events (large gains or losses) are more likely than a model based on a normal distribution would predict. This implies a higher tail risk.

In the case of MSFT, the kurtosis of −0.35 is slightly platykurtic. This suggests that the distribution is flatter, and extreme values ​​(both highs and lows) are slightly less likely than would be expected from a normal distribution.

For an investor, this means that while volatility (measured by the standard deviation) is high, the probability of experiencing catastrophic drops or massive spikes is slightly lower than with other assets that have high kurtosis. Lowering investment risk in this context means that the distribution is not as concentrated at the extremes, offering an appearance of relative stability in the center, even though overall volatility is high.

The charts show a clear upward trend, and the table provides metrics to evaluate which model best explains this trend, indicating that a simple straight line only explains about half of the MSFT price variation over time. This is a moderate fit.

The 3rd-order polynomial correlation (66.80%) shows that a third-order polynomial explains the trend significantly better than the linear model.

The 6th-order polynomial correlation (99.51%) shows that a 6th-order model fits the data almost perfectly, as seen in the chart, capturing even the smallest fluctuations. This demonstrates that MSFT's growth has not been linear, but rather accelerated and irregular.

The high growth rate and the 99.51% correlation with the 6th-order model confirm that MSFT has experienced strong exponential or parabolic growth over the period. The sixth-order polynomial model offers the best predictive tool for estimating future prices (90- and 180-day forecasts).

The 15-year, 9-month return of 1505.17% is an extraordinary performance. The average monthly return of 1.46% (calculated and confirmed by the value in the table) and the 95% confidence interval are 4.40–444.46. This means that, with 95% confidence, the average MSFT stock price will fall within this range. This is a very wide range, which underscores the high volatility.

The p-value shows that the closing price of 496.82 is an all-time high within 99% of observed prices. This is crucial for investment decisions, as this implies that the stock is trading at a very high level relative to its historical performance, which could indicate that it is overvalued or that its growth has accelerated significantly.

From the perspective of the presented statistical and econometric analysis, the 1505.17% return and the near-perfect correlation of the polynomial model indicate that MSFT is a company with solid, accelerated, and consistent growth. There is a low probability of catastrophic "tail events."

 

The large standard deviation and wide confidence interval imply that the stock is highly volatile and its price can fluctuate dramatically.

The current price of 496.82 is at the 99.22nd percentile of observed prices. This suggests that the stock is at a resistance or top point, increasing the risk of a downward correction.

Investing in MSFT at this time carries a high short-term risk due to its all-time high price and high volatility, despite its excellent long-term growth potential (supported by profitability and the polynomial trend).

Caution is advised. While the 90- and 180-day forecasts (388.32 and 398.48, respectively) suggest a price correction could be expected (or that the 6th-order polynomial model may be overfitted to the data), the strength of the long-term trend is undeniable.

If you are a long-term investor who tolerates high volatility, investing is advisable (using a Dollar-Cost Averaging strategy to mitigate the risk of buying at the peak).

If you are a short-term investor, now is not the optimal time, as the risk of a correction is high.

Technical and fundamental analysis confirms the need for extreme caution in short-term investing, despite the company's long-term strength indicated by econometric analysis.

The consensus of technical indicators is the most critical factor at the moment (November 7, 2025, at 9:06 PM GMT, with a closing price of 497.10).

The RSI(14), or Relative Strength Index, with a value of 32.94 (Sell), indicates that the stock is near oversold levels, confirming that the price has fallen significantly in recent sessions.

The STOCHRSI(14), or Fast Stochastic Oscillator, shows a value of 100, indicating overbought conditions. This oscillator, which measures the speed of the RSI, is at its maximum, indicating that the stock has recently experienced a very rapid upward surge (taking it to an all-time high of 496.82), but that this surge is unsustainable and requires an immediate pullback.

The MACD (12.26), or Moving Average Convergence/Divergence Ratio, is at -4.8 (Sell). The MACD line is below the signal line, a classic sign of developing bearish momentum.

The closing price (497.10) is slightly above the classic pivot point (496.04) but below the major resistance levels (R1 at 497.39 and R2 at 498.81).

Most of the resistance levels R1, R2, and R3 are located in the 497.39 to 500.16 range. For the stock to resume its upward trend, it must break through these levels.

If the price falls, support levels S1, S2, and S3 (494.62 to 491.85) will be key. A break below S3 could signal a deep correction.

Fundamental data reinforces the thesis that Microsoft is a premium company, but the current valuation is demanding.

The cumulative probability of 99.22%, along with technical analysis (overbought on the Stochastic Oscillator and selling signals), validates the cumulative probability's caution signal. The current price is at an extreme point in its historical distribution.

The excellent historical performance (1505.17%) and solid fundamentals justify why investors are willing to tolerate high volatility and a high standard deviation. Belief in exponential growth is what drives the high P/E ratio. The forecasts of 388.32 (90 days) and 398.48 (180 days) suggest that the polynomial model (albeit with a 99.51% correlation) projects a downward correction or consolidation from the current highs, which is fully aligned with the "Strong Sell" signals from the technical analysis.

The combination of statistical, technical, and fundamental analysis leads to a conclusion of extreme caution regarding immediate entry.

 For the long-term (strategic) investor, the quality of the fundamental analysis is undeniable (high margins, high ROE, market position). Corrections driven by technical sell signals (such as the current ones) are often buying opportunities for the strategic investor.

For the short/medium-term (tactical) investor, investment is discouraged. The "Strong Sell" consensus and the

Enviar comes. Overbought conditions at an all-time high indicate a high probability of a price drop in the coming weeks (as suggested by the econometric model forecasts).

The best course of action is to wait for a correction. Monitor support levels: if the price approaches the 390-410 range (which aligns with forecasts and could be considered the "fair value" after a technical correction), a safer entry opportunity with a better risk-reward ratio will present itself for the long term.