Microsoft is preparing to announce their fiscal fourth-quarter earnings this week, and the anticipation from Wall Street is overwhelmingly positive. With all 19 analysts tracking Microsoft via Visible Alpha giving it a 'buy' or equivalent rating, their average expected price is near $578, indicating a possible 12% increase from the closing price of $513.71.
Microsoft's strategic development of AI, especially through Copilot, their chatbot and their cloud platform Azure, is noted by industry insiders such as Wedbush. They recently raised their price target for the tech heavyweight to $600, citing this "next phase of monetization on the AI front" as essential growth drivers.
Forecasts predict Microsoft's Intelligent Cloud segment, which includes Azure, will surge 22% to $28.96 billion, according to Visible Alpha. Citi analysts also selected Microsoft as their 'top pick,' with a price target of $613, underlining their competitive pricing and nearly unparalleled margin power in the enterprise software market.
Microsoft is expected to report a quarterly revenue of $73.86 billion, a 14% increase YoY, and a net income of $25.27 billion ($3.38 per share), outpacing the previous year's $22.04 billion ($2.95 per share).
The tech world will also be keen to learn about Microsoft’s future AI strategies, especially pertaining to AI spending aspirations for fiscal year 2026, which has just begun. This comes after CFO Amy Hood's statement in April that capital expenditures are projected to increase, albeit at a slower rate compared to fiscal 2025. Microsoft had previously projected $80 billion of capex for fiscal 2025.
Microsoft is set to reveal its earnings after the closing bell on Wednesday. It will be followed by tech titans Google, Meta, Amazon, and Apple in the course of the week.