HomeMarket NewsMicrosoft (MSFT) Q1 Earnings Forecast: Key Expectations and Insights

Microsoft (MSFT) Q1 Earnings Forecast: Key Expectations and Insights

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Microsoft’s Q1 Earnings Report: A Key Moment for Investors

On October 30, tech giant Microsoft (MSFT) will reveal its financial results for the first quarter of Fiscal 2025. Investors are particularly interested in Azure’s performance and how much the company is benefiting from advancements in artificial intelligence (AI). Analysts project Q1 FY25 earnings per share (EPS) will climb about 4% year-over-year to $3.11, while revenue is expected to surpass $64.57 billion, marking an increase of more than 14%.

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Analysts Weigh In Ahead of Microsoft’s Q1 Earnings

Recently, Citi analyst Tyler Radke lowered the price target for Microsoft stock to $497 from $500 but maintained a Buy rating. He expressed concern over the stock’s stagnant performance in the last quarter, especially regarding high capital expenditures and disappointing growth in Azure, coupled with slowing earnings increases.

Despite mixed signals leading up to the Q1 results, Radke pointed to positive indications from Citi’s reseller and CIO survey. He believes a pleasant surprise in Q2 is possible. Overall, Radke remains optimistic, viewing MSFT as a strong buy during pullbacks. He anticipates a shift in investor sentiment as Azure growth accelerates and earnings improve in the latter half of the Fiscal Year.

Evercore analyst Kirk Materne echoed this sentiment, affirming a Buy rating with a price target of $500. He addressed concerns about MSFT’s underperformance against the S&P 500 Index (SPX) in recent months, asserting the company’s strong fundamentals. Materne noted robust demand for Microsoft’s Cloud services, the rising popularity of Copilot, and the company’s growing market share in security.

While Materne recognized that immediate concerns about Azure’s growth and AI investment returns could affect the stock, he highlighted that upcoming growth in Azure in the second half of Fiscal 2025 could serve as a catalyst for higher share prices. He remains confident in MSFT’s long-term opportunities in generative AI.

Options Traders Expect Significant Stock Movement

TipRanks’ Options tool provides insights into what traders are anticipating from Microsoft’s stock after the earnings report. This expectation is derived from the at-the-money straddle of options expiring closest to the announcement date.

Currently, the tool indicates that options traders are expecting an approximate 4.7% movement, either up or down, in MSFT stock following the earnings announcement.

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Should Investors Buy, Sell, or Hold MSFT Stock?

With 27 Buy ratings and three Holds, Microsoft has received a Strong Buy consensus rating on TipRanks. The average price target for MSFT stock is $503.15, suggesting an upside potential of 18%. Year-to-date, shares have increased over 13%.

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See more MSFT analyst ratings

Disclosure

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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