Microsoft Earnings: Will AI And Cloud Growth Drive Earnings?

Core Insights - Microsoft Inc. is set to report earnings, with expectations of a gain of $3.65/share on revenue of $74.96 billion, while the Whisper number suggests a gain of $3.71/share [3] - The stock recently reached a record high of $555.45/share and is currently trading around $539/share, indicating potential volatility post-earnings [2][5] Financial Performance - Earnings have shown consistent growth: $5.76/share in 2020, $7.97 in 2021, $9.21 in 2022, $9.81 in 2023, and $11.80 in 2024; projected to reach $13.64 in 2025 and $15.56 in 2026 [4] - The current price-to-earnings ratio stands at 40, which is 1.5 times that of the S&P 500 [4] Business Segments - The Productivity and Business Processes segment includes offerings like Microsoft Teams, Office 365, LinkedIn, and Dynamics 365, focusing on cloud-based applications and business solutions [7] - The Intelligent Cloud segment encompasses Azure, SQL Server, and enterprise services, highlighting the company's strong position in cloud computing [8] - The More Personal Computing segment covers Windows licensing, devices like Surface and HoloLens, and gaming through Xbox, showcasing a diverse product portfolio [9] Technical Analysis - The stock is trading 3% below its record high and is above both its 50 and 200-day moving averages, indicating strong technical support [5] - Market reactions to earnings will be closely monitored, with expectations for a potential gap up or down based on performance [11]