Microsoft (NASDAQ:MSFT) Issues Quarterly Earnings Results

Microsoft (NASDAQ:MSFT) posted its quarterly earnings data on Wednesday. The software giant reported $4.89 earnings per share for the quarter, topping the consensus estimate of $4.72 by $0.17, FiscalAI reports. Microsoft had a return on equity of 32.31% and a net margin of 41.17%. The business had revenue of $92.28 billion during the quarter, compared to analysts’ expectations of $90.62 billion. During the same quarter in the previous year, the firm earned $4.13 EPS. The firm’s revenue was up 18.8% compared to the same quarter last year.

Here are the key takeaways from Microsoft’s conference call:

• Microsoft exceeded expectations in fiscal Q1, with revenue up 19% to $92.3 billion, operating income up 21%, and adjusted EPS of $4.89. Microsoft Cloud revenue accelerated 30% to $63.9 billion.
• Azure revenue grew 48%, while management guided to 49%–50% constant-currency growth in Q2. Demand continues to exceed supply, and efficiency gains across Microsoft’s GPU and CPU fleet helped offset delayed third-party capacity.
• AI adoption continued to broaden, with Copilot daily users up nearly 50% quarter-over-quarter, Foundry revenue more than tripling, and commercial remaining performance obligations rising 73% to $677 billion. Management highlighted growing enterprise deployments and increasing usage-based consumption.
• AI infrastructure investment remains substantial, with $45.2 billion of Q1 capital expenditures, expected Q2 spending above $50 billion, and approximately $170 billion planned for calendar 2026. The spending mix toward Azure is pressuring Microsoft Cloud gross margins, while the company may access additional financing.
• Several non-AI businesses remain under pressure: Microsoft 365 E3 and standalone SKU sales execution was weaker, commercial bookings declined 12%, and Windows OEM revenue fell 27% amid elevated inventory and weaker PC demand. Management expects Windows OEM and Devices revenue to decline in the mid-30s in Q2.

Microsoft Trading Down 1.4%

Shares of MSFT traded down $7.30 during trading hours on Friday, reaching $522.84. The stock had a trading volume of 8,177,300 shares, compared to its average volume of 33,360,984. The company has a market cap of $3.88 trillion, a P/E ratio of 27.27, a P/E/G ratio of 1.67 and a beta of 1.10. Microsoft has a 52 week low of $349.20 and a 52 week high of $551.15. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The firm has a 50-day moving average of $512.10 and a 200 day moving average of $438.21.

Microsoft Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be given a $0.98 dividend. The ex-dividend date is Thursday, November 19th. This represents a $3.92 dividend on an annualized basis and a dividend yield of 0.7%. This is an increase from Microsoft’s previous quarterly dividend of $0.91. Microsoft’s dividend payout ratio is currently 20.27%.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Cloud and AI growth exceeded expectations. Revenue rose 18.8% year over year to $92.28 billion, while EPS of $4.89 beat the $4.72 consensus. Azure revenue surged 48% to approximately $33.2 billion, and Microsoft Cloud revenue reached $63.9 billion. The company also issued second-quarter revenue guidance of $96.0 billion-$97.1 billion, above the $95.7 billion analyst estimate. Microsoft beats quarterly cloud revenue estimates
• Positive Sentiment: Investors see Microsoft as a financially stronger AI leader. Microsoft generated positive free cash flow despite $45.2 billion in data-center spending, giving it more flexibility than Alphabet to fund AI investment. Analysts including Citigroup, TD Cowen, DA Davidson and Wolfe Research raised targets or ratings, while Azure efficiencies and a $677 billion commercial backlog supported the long-term outlook. Microsoft’s cash flow edge over Google
• Neutral Sentiment: Microsoft is borrowing $25 billion for its AI buildout. The first major bond offering since 2017 demonstrates strong access to capital, but also highlights how rapidly infrastructure expenses are rising. Demand reportedly exceeded $115 billion, reducing immediate funding concerns while keeping investors focused on AI returns. Microsoft plans to raise $25 billion in debt
• Negative Sentiment: Spending, capacity delays and execution risks remain the main overhangs. Microsoft lowered its fiscal 2026 capital-expenditure outlook to $170 billion from $175 billion because third-party AI capacity deliveries were delayed, not because demand weakened. Investors are nevertheless questioning whether spending can generate adequate returns. The company’s offer of buyouts to roughly 60,000 employees and a 22% decline in Windows sales also add restructuring and PC-market concerns. AI buildout hits delays as Microsoft and Google adjust capex

Insiders Place Their Bets

In other Microsoft news, CEO Satya Nadella sold 86,525 shares of the business’s stock in a transaction dated Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the transaction, the chief executive officer directly owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Amy Hood sold 41,674 shares of the stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $498.27, for a total value of $20,764,903.98. Following the completion of the sale, the executive vice president owned 533,624 shares of the company’s stock, valued at $265,888,830.48. This trade represents a 7.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 150,314 shares of company stock valued at $75,404,992 in the last three months. Insiders own 0.03% of the company’s stock.

Analyst Upgrades and Downgrades

A number of brokerages recently issued reports on MSFT. BNP Paribas Exane cut shares of Microsoft from a “strong-buy” rating to a “hold” rating in a research report on Monday, October 5th. Needham & Company LLC initiated coverage on shares of Microsoft in a research note on Wednesday, September 23rd. They issued a “buy” rating on the stock. Rothschild & Co Redburn set a $440.00 price target on Microsoft in a research note on Monday, September 21st. CLSA reiterated an “outperform” rating on shares of Microsoft in a report on Thursday, July 30th. Finally, Sanford C. Bernstein increased their target price on Microsoft from $662.00 to $722.00 and gave the company an “outperform” rating in a research note on Thursday. One investment analyst has rated the stock with a Strong Buy rating, forty-five have assigned a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $609.54.

Microsoft Company Profile

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company’s principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.