Though they've cooled somewhat over the past fortnight, shares of tech titan Microsoft Corp (NASDAQ: MSFT) are still up 20% this year. For now, the 5% drop since the first week of July does not look like anything to worry about; it is more of a case of Microsoft getting pulled down by NVIDIA's (NASDAQ: NVDA) dip. 

For those of us on the sidelines, this is good news. Microsoft has been one of the standout tech stocks of the past year, and this could well be a rare entry opportunity opening up. In fact, there are several reasons to support this, and investors should be excited. Let's jump in and take a look. 

Consistent Bullish Analyst Upgrades for Microsoft

The first thing to consider is the consistent run of bullish analyst upgrades and updates that Microsoft has been on the receiving end of. As we've previously examined, this isn't exactly a new trend either. This week alone, the Mizuho and Bank of America teams reiterated their Buy ratings on the stock while upping their price targets to $480 and $510, respectively. 

Microsoft shares closed at $443 on Wednesday evening, pointing to a solid potential upside of some 15%. And theirs aren't even the highest targets, either. Truist Financial did that with their $600 price target last month, which, with the recent dip, is now indicating an upside of some 35%. Not bad for a $3 trillion business. 

Much of the bullish sentiment coming from these analysts centers around the expected strong performance of Microsoft's cloud business. BMO Capital Markets, for example, had a call with industry experts earlier this month and published an interesting note afterward. The feeling is that Microsoft's Azure product should see something like 31% year-over-year growth. 

High Expectations for Microsoft's Upcoming Earnings Report

This optimism is fueling high expectations for the company's upcoming earnings report, due at the end of the month. As a catalyst, they don't come much better than this, and considering how high expectations are for Microsoft to blow it out of the water, this dip looks increasingly appealing as an entry opportunity. 

Wedbush's Dan Ives made this point earlier this week when he named Microsoft one of his favorite names heading into the Q2 earnings season. Morgan Stanley said the same, with analyst Keith Weiss writing in a note to clients that he expects a "clean beat." Two weeks out from the report, his refreshed price target of $520 speaks volumes about his bullishness on Microsoft shares rallying into, and very likely through, the earnings report. 

The team at Citi echoed all this, writing in a note to investors just yesterday that they remain "constructive on Microsoft heading into Q4 results, expecting a healthy top/bottom-line beat and strong Azure/CapEx spending to underscore Microsoft's AI leadership position in the sector".

Maintaining Momentum: Positive Outlook for Microsoft

Considering that Microsoft's relative strength index (RSI) was well over 70 at the start of the month, indicating extremely overbought conditions, the fact that it's since been brought down to just 45 only adds to the bull thesis. Those of us who take advantage of the dip can do so with the feeling we're getting a bit of a bargain. It was also interesting to see how, despite setting a new low at the start of yesterday's session, the stock rallied throughout the rest of the day and closed near its high. 

This suggests that a solid layer of buyers stepped in, and the bears were unable to take the stock any lower. If Microsoft can maintain that kind of momentum heading into the weekend and next week, things could get interesting pretty quickly.