Microsoft CEO Satya Nadella speaks at Axel Springer Neubau in Berlin on October 17, 2023.
Ben Kleeman | Getty Images
microsoft is scheduled to release first-quarter results after the close of regular trading on Wednesday.
Here’s what analysts are expecting, according to the consensus forecast for LSEG.
Earnings per share: $3.67 Revenue: $75.33 billion
The cloud continues to be a big driver of Microsoft’s growth as the business proves to be a big beneficiary of the artificial intelligence boom. Last quarter, Microsoft revealed the size of its Azure cloud infrastructure business in dollar terms for the first time. The company announced that fiscal year 2025 revenue from Azure and other cloud services rose 34% from the previous year to more than $75 billion.
Microsoft is expected to report a 15% increase in total revenue for the quarter from $65.6 billion a year ago, according to LSEG.
Analysts will be paying close attention to Microsoft’s capital spending as it rushes to build out the infrastructure needed to support AI demands.
Microsoft said in July that it expected to spend $30 billion in capital expenditures and assets acquired through leases during the quarter, representing annual growth of more than 50%. CFO Amy Hood told investors at the time that capital spending would increase in fiscal 2026 but slow from 2025 onwards.
Microsoft stock jumped 4% after fourth-quarter results that included better-than-expected earnings and revenue. Ahead of Wednesday’s earnings, Jefferies analysts who recommend the stock to buy said they expect Azure to deliver strong upside and the company is well-positioned despite its seasonally weakest quarter.
In addition to Azure, they said they see momentum from the Microsoft 365 productivity suite driving “solid booking growth and increased AI contributions.”
Analysts at TD Cowen also gave the stock a buy rating and said they expect Microsoft to provide sound guidance, particularly on Azure. Analysts noted Microsoft’s ongoing infrastructure projects, which they said could add $30 billion to $40 billion to the company’s annual revenue once all sites are in place.
Much of Microsoft’s AI momentum comes from its close relationship with OpenAI.
OpenAI completed its reorganization on Tuesday and formally announced the outline of Microsoft’s investment in the company. Under the new structure, OpenAI’s nonprofit organization will own 26% of the for-profit arm’s equity, worth about $130 billion. Microsoft will own a 27% stake worth about $135 billion, with current and former employees and investors owning the remaining 47%.
Microsoft stock has risen 29% since the beginning of the year, closing at a record high of $542.07 on Tuesday. Nasdaq will rise 23% in 2025.
Microsoft will hold its quarterly conference call with investors at 5:30 p.m. ET.
Attention: Microsoft’s market cap soars to $4 trillion
