What Analysts Think of Microsoft Stock Ahead of Earnings

Earnings and Analyst Sentiment - Microsoft is set to report fiscal second-quarter earnings after the market closes Wednesday, with analysts largely bullish ahead of the results [1] - Investor sentiment has shifted negative due to concerns around gross margins, capex, GenAI monetization, and the OpenAI relationship, causing Microsoft to underperform other large-cap software companies over the past three months [1] - Morgan Stanley analysts noted that the "wall of worry" has created a potentially attractive entry point for the stock [4] Analyst Ratings and Price Targets - Morgan Stanley lowered its price target to $540 from $548 but highlighted Microsoft's strong position in generative AI and recent market trends as an attractive entry point [2] - 18 out of 19 analysts tracked by Visible Alpha have a "buy" or equivalent rating, with 1 "hold" rating [2] - The consensus price target is just over $517, representing a 16% premium to the stock's Friday close around $444 [2] - Jefferies holds a "buy" rating and a price target of $550, expressing confidence in Azure's reacceleration in the second half of the fiscal year [4] Revenue and Earnings Expectations - Wall Street expects Microsoft to report revenue of $68.92 billion, up 11% year-over-year, and earnings of $23.36 billion, or $3.13 per share, up from $21.87 billion, or $2.93 per share a year earlier [3] - Revenue from Microsoft's Intelligent Cloud segment, including Azure, is expected to climb 20% to $25.76 billion [3] - Jefferies analysts pointed to a recent Microsoft blog post announcing a "new, large Azure commitment" from OpenAI as a positive indicator for Azure's growth [4] Stock Performance - Microsoft shares are up about 11% over the past 12 months [4]