Software and cloud computing titan Microsoft (MSFT, Financials) is due to disclose fiscal fourth-quarter results on July 29, as investors assess robust demand for artificial intelligence against higher capital investment.
Based on the information, the options market is pricing in a 7.24% move in Microsoft shares. That compares to an average post earnings move of around 5.2% throughout the last four quarters.
Analysts predict Microsoft to post earnings of $4.24 per share, up 16% from a year ago. Revenue is expected to grow nearly 15% to $87.62 billion.
Wall Street will be looking for growth in Azure, demand for AI services and adoption of Copilot throughout Microsoft's suite of productivity products. Investors also want further clarity that the company's large investments in data centers and AI technology are generating attractive returns.
Bernstein's Mark Moerdler reiterated a Buy rating with a price target of $646. Benchmark analyst Yi Fu Lee also maintained a Buy rating with a target of $525.
Microsoft shares have plummeted 21% this year amid fears over spending and potential disruption to traditional software businesses. Investors will now be watching Azure performance, Copilot uptake and management's outlook for fiscal 2027.