What You Need To Know Ahead of Microsoft's Earnings Release

Core Insights - Microsoft Corporation is the largest software company globally, holding over 80% market share in PC operating systems and a market cap of $3.9 trillion [1] - The company is expected to report a profit of $3.66 per share for Q1, reflecting a 10.9% increase from the previous year [2] - Analysts project an EPS of $15.41 for fiscal 2026, a 13% increase from fiscal 2025, and a further 16% increase to $17.88 in fiscal 2027 [3] Stock Performance - Microsoft stock has increased by 26.6% over the past 52 weeks, slightly underperforming the Technology Select Sector SPDR Fund's 27.5% rise but outperforming the S&P 500 Index's 17.4% gain [4] - Following the release of Q4 results, Microsoft stock gained nearly 4%, driven by strong contributions from Cloud and Microsoft 365 Commercial products [5] Financial Metrics - The company's Q4 topline grew 18.1% year-over-year to $76.4 billion, exceeding consensus estimates by 3.7% [5] - Despite a slight drop in gross margins, a notable decline in operating expenses as a percentage of revenues resulted in a 23.6% increase in net income to $27.2 billion, with EPS of $3.65 surpassing expectations by 9% [6] Analyst Ratings - The consensus rating for Microsoft remains highly optimistic, with 40 "Strong Buys," five "Moderate Buys," and three "Holds" among 48 analysts [7] - The mean price target of $627.15 indicates a potential upside of 19.5% from current price levels [7]