Microsoft's Q4 FY2026 Earnings Report: A Make-or-Break Moment for Azure Growth

Microsoft's (MSFT) Q4 FY2026 earnings report is set to be released on July 30, with analysts expecting revenue of $87.7 billion and earnings per share (EPS) of $4.24.

The stock has been trading at a relatively low valuation multiple of 20 times forward earnings, which is the lowest in years for a company growing revenue by 18% annually.

However, investors are closely watching Microsoft's capital expenditure (capex) guidance and Azure growth rate, as Alphabet's recent post-earnings selloff has set a new standard that AI capex will need to be correlated with revenue growth acceleration.

If Microsoft reports higher-than-expected Azure growth rates above 35% next quarter, along with sustained capital expenditure growth, the stock could re-rate and see a parabolic move upwards. On the other hand, if capex guidance is raised without proportional Azure growth acceleration, concerns around free cash flow will persist.

The market is also looking for confirmation of Microsoft's commercial Copilot seat growth, which currently stands at 25 million seats with an average revenue per user (ARR) that analysts can factor into FY2027 estimates.