Goldman Sachs analyst Heather Bellini said in her research note on Tuesday that it is time to sell shares of Microsoft [NSADAQ:MSFT], as the company faces currency headwinds and weakness in commercial licensing, putting downward pressure on revenue and earnings-per-share forecasts over the next three fiscal years. Ms. Bellini believes that MSFT will drop to U.S. $38 per share within the next 12 months.

Goldman Sachs thinks that Microsoft's commercial-licensing segment, which sells software and services like Office, Office 365, Exchange, and SQL Server to large corporations, could face a tough year-on-year comparison because Microsoft dramatically raised prices for many of its most popular server products last year. 

The segment was already in trouble during the second-quarter fiscal year 2015 as it posted just U.S. $10.7 billion in revenue, down 2% from last year, and missed analysts’ expectations of U.S. $10.9 billion. More important is that the revenue from the commercial-licensing segment makes up more than a third of its overall revenue.

Another takeaway is that overall shipments of notebooks and desktop PCs looks like it is headed for a precipitous decline for the third-quarter of fiscal year 2015. Intel [NASDAQ:INTC], supplier of chips for more than 80% of the PCs, warned last month that "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." Intel also blamed the reluctance of small and mid-size businesses to shift away from Windows XP to Windows 7, 8 or 8.1. 

According to NetMarketShare, Windows 7 users increased by 9.2% year-on-year, while Windows 8 and 8.1 users have increased by just 2.7%. Almost 17% of the PC users are still hanging onto Windows XP. Microsoft is planning to give away a free one year upgrade, from Windows 8.1 to Windows 10 when it launches, on Windows PC’s and devices, such as the Surface 3. Thus, Microsoft won't generate a lot of revenue from Windows 10 at least until fiscal year 2016.

Microsoft didn’t definitely say when the company will launch Windows 10. According to Kevin Turner, Chief Operating Officer of Microsoft in late 2014, the final version of Windows 10 could be shippied as soon as summer 2015. Meanwhile, Microsoft is being challenged by Google Inc. [NASDAQ:GOOGL], with the U.S. $149 Chromebook laptops in the low-priced computer market, and by Apple [NASDAQ:AAPL], with the U.S. $1,299 Apple MacBook in the high-end market. 

From our technical viewpoint, a bearish inverted cup chart pattern, with a left handle, is identified in the MSFT chart pattern. If a right handle is formed in the next few months, the inverted cup and handle chart pattern could turn into a bearish head-and-shoulders chart pattern with a neckline between the U.S. $39 and $40 levels. The price projection will be between U.S. $30 and $31, if the head-and-shoulders pattern is confirmed. 

Of course, MSFT could bounce off the U.S. $40 level and make a short-term double bottom, if the fundamentals and investor sentiment shifts. 

One should also keep an eye on the 50-day SMA, which crossed over the 200-day SMA in early March, and formed a death cross. Although the death cross may not necessarily signal that the stock is going to crash soon, one may want to be cautious about the MSFT stock as other technical indicators are already very bearish.

Disclosure: Long position in AAPL. No Positions in MSFT, INTC, GOOGL or any other stocks mentioned.