Microsoft Corporation, based in Redmond, Washington, with a staggering market cap of $3.1 trillion, stands as a pivotal figure in the technology realm. The tech giant, known for its dominance in PC software and a broad spectrum of products ranging from cloud solutions to gaming consoles, is poised to unveil its fiscal Q1 earnings for 2025 on October 22.
Analysts are anticipating a profit of $3.08 per share for Microsoft, showcasing a 3% growth from the year-ago quarter’s $2.99 per share. Notably, Microsoft has consistently exceeded Wall Street’s bottom-line estimates over the past four quarters. In the final quarter of 2024, Microsoft achieved an impressive EPS of $2.95, surpassing the consensus estimate by 1.7%.
For fiscal 2025, market experts forecast Microsoft to disclose an EPS of $13.04, indicating a significant 10.5% surge from the $11.80 recorded in fiscal 2024. Looking ahead to fiscal 2026, analysts expect a robust year-over-year EPS growth of 15.2%, reaching $15.02.
Throughout 2024, Microsoft’s stock value ascended by 10.5%, albeit falling behind the S&P 500 Index’s robust 19.7% surge and the Technology Select Sector SPDR Fund’s 16% climb on a year-to-date basis.
Despite surpassing EPS estimates, Microsoft observed a slight dip of over 1% on July 31 due to underwhelming cloud computing revenue of $28.5 billion. This subpar performance of the cloud division overshadowed the strong Q4 total revenue of $64.7 billion, sparking concerns about Azure’s growth tapering to 29% from the previous quarter’s 31%. Moreover, Microsoft’s revenue guidance for the upcoming quarter did not meet analyst expectations, triggering heightened investor doubt.
However, on September 10, Microsoft made a market splash with the unveiling of a groundbreaking AI product named “Strawberry,” in collaboration with its extensively invested partner, OpenAI. This pivotal development bolsters Microsoft’s strategic objective of enriching its software portfolio with cutting-edge AI capabilities.
The overall sentiment among analysts towards Microsoft stock remains bullish, with a majority labeling it as a “Strong Buy.” Out of 38 analysts covering the stock, 33 advocate a “Strong Buy,” three recommend a “Moderate Buy,” and the remaining two propose a “Hold.” While slightly less bullish than three months ago, with 34 analysts advocating a “Strong Buy,” the average price target for MSFT stands at $503.55, indicating a potential upside of 21.2% from the current levels.
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