Microsoft is poised to release its fiscal first-quarter earnings after the market closes today, with analysts and investors anticipating a potential surge in the stock price. Current options pricing suggests that Microsoft (MSFT) shares could swing up to 4.5% in either direction by the end of the trading week. This volatility could push the stock to a new record high of $551 or pull it down to $504, depending on the results.
The tech giant has seen a 9% increase in its stock value this year, driven by strong demand for its Azure cloud services and AI assistant Copilot. In July, Microsoft's stock soared 15% in a single day after the company exceeded earnings expectations, largely due to robust cloud revenue.
Analysts are closely watching Microsoft's performance, along with that of other cloud leaders like Alphabet and Amazon, to gauge the demand for AI technologies. Morgan Stanley analysts noted that sentiment around Microsoft shares has improved significantly following the last quarter's strong results and optimistic guidance for fiscal year 2027. They believe the stock's valuation remains reasonable relative to its growth potential and have set a price target of $600.
Microsoft is expected to report fiscal first-quarter revenue of $90.63 billion, representing a 17% year-over-year increase, with Intelligent Cloud revenue projected to jump 33% to $41.09 billion. Adjusted earnings are anticipated to rise to $4.73 per share, up from $4.13 a year ago. All 13 analysts tracked by Visible Alpha recommend buying Microsoft shares, with a mean price target of $628, suggesting nearly 20% upside from the current level.