Microsoft Earnings Report: What Investors Should Expect

Microsoft is set to announce its second-quarter earnings for Fiscal 2025 on January 29, after the market closes. Investors will be looking closely at how well Microsoft is benefiting from its big investments in artificial intelligence (AI).

Wall Street expects Microsoft to report a 6.1% increase in earnings per share (EPS), reaching $3.11. Revenue is expected to rise 11% to $68.89 billion.

Microsoft has beaten earnings expectations for nine straight quarters, but investors are cautious after slower-than-expected revenue guidance for the second quarter.

Analysts’ Views on Microsoft’s Earnings

Analysts are divided on Microsoft’s performance. TD Cowen analyst Derrick Wood has a “Buy” rating on Microsoft with a price target of $475. He believes the company faces challenges, including currency issues and possible slower growth in Azure. Still, he expects the results to meet expectations on a constant currency basis.

Bank of America analyst Bradley Sills also has a “Buy” rating, with a higher price target of $510. Sills expects strong growth in Azure and Microsoft’s Office suite. He predicts Azure’s growth could reach 32.5% year-over-year, driven by AI. Sills also believes Microsoft will raise its margin outlook for the year.

What Options Traders Expect

Options traders expect Microsoft’s stock to move by 4.1% in either direction after the earnings report.

Is Microsoft a Buy, Hold, or Sell?

Microsoft has a “Strong Buy” consensus rating, with 27 “Buy” ratings and 2 “Hold” ratings. The average price target for Microsoft stock is $509.42, suggesting a potential 15% upside.