Should You Buy Microsoft Stock Before July 30?

Core Viewpoint - Major U.S. technology companies, including Microsoft, are set to report their quarterly results, focusing on financial performance and advancements in artificial intelligence (AI) [1] Group 1: Microsoft Financial Performance - Microsoft will report its fiscal 2025 fourth quarter results on July 30, with expectations for updates on its Copilot AI assistant and AI cloud services [2] - The stock has increased by 20% this year, raising concerns about its valuation as it trades at a price-to-earnings (P/E) ratio of 39.1, above its five-year average of 33.4 [15] - Wall Street estimates suggest a 13% increase in earnings per share for fiscal 2026, leading to a forward P/E ratio of 33.4, indicating potential for long-term investment returns [16] Group 2: AI Developments and Copilot Adoption - Microsoft’s Copilot, developed in collaboration with OpenAI, is integrated into various software products and is available as a paid add-on for Microsoft 365 [4] - Over 400 million Microsoft 365 licenses are in use globally, and the addition of Copilot could generate billions in recurring revenue [5][6] - The number of organizations using Copilot for 365 tripled year-over-year, indicating strong adoption and potential for further growth [6][7] Group 3: Azure Cloud and AI Contribution - Azure cloud platform experienced a 33% year-over-year revenue growth, with Azure AI contributing 16 percentage points to this growth [11] - The fourth quarter may see Azure AI becoming the primary growth driver for the cloud platform, validating Microsoft's investments in AI [13] - Microsoft has spent over $60 billion on AI-related capital expenditures in the first three quarters of fiscal 2025, with plans to increase spending to meet customer demand [14] Group 4: Market Outlook and Investment Considerations - Investors are advised to consider their time horizon; short-term gains may be limited due to high valuation, while long-term holders may see positive returns [18]