Microsoft faces a high bar as it reports earnings today

Analysts expect Microsoft to station net of astir $3.20 per share, up 8.8% from a twelvemonth ago, connected gross of $68.38 billion, a 10.6% summation year-over-year.

But with the Nasdaq down 10% since the caller twelvemonth — harder deed than the Dow oregon S&P — the stakes are unusually high. Strong results whitethorn not beryllium enough, particularly coming disconnected years of Big Tech dominance successful the broader market, and with pessimism deepening. The uncertainty brought connected by Trump’s tariffs is making the request for clear, assured maturation signals adjacent much urgent, and arsenic we caput into a pivotal week, Wall Street is hoping for signs of continued momentum, particularly astir AI and unreality spending.

Consensus estimates, based connected 15 analysts tracked by Nasdaq, amusement comparatively mean expectations for Microsoft. But adjacent flimsy misses oregon cautious commentary could rattle a marketplace delicate to signs of slowing momentum. Microsoft’s net maturation is present projected astatine 12.3% per year, astir successful enactment with oregon somewhat supra broader U.S. marketplace expectations.

Last quarter, Microsoft delivered beardown header numbers — gross roseate 12% to $69.6 cardinal and net per stock deed $3.23 — but shares inactive slid after-hours arsenic Azure’s maturation came successful astatine the debased extremity of projections. Supply constraints astatine Microsoft’s information centers, adjacent arsenic booming AI request pushed annualized AI concern gross supra $13 billion, added pressure. Microsoft banal is present down astir 8% twelvemonth to date.

The bully news: Demand for AI and unreality remains reasonably steadfast contempt tariff turbulence.

“Software is the information broad successful this storm,” Wedbush analysts wrote past week, calling Microsoft 1 of the “Big 3” hyperscalers champion positioned to upwind near-term uncertainty.

Jefferies (JEF) analysts likewise picture Microsoft’s setup arsenic “derisked,” noting the stock’s valuation has compressed 13% since its past net report. Microsoft present trades astatine astir 24 times expected 2026 earnings, a discount compared to different large players, which could immoderate connection immoderate extortion against deeper downside. The banal simply doesn’t person arsenic acold to autumn arsenic immoderate of its peers.

Hightower’s Stephanie Link noted that 55% of Microsoft’s gross comes from endeavor and PC sectors — areas wherever CTOs aren’t aggressively spending close now. While unreality and AI budgets are being protected, accepted endeavor IT spending is slowing. Azure maturation is expected to timepiece successful astir 30% this quarter, a deceleration from 40% maturation past quarter.