Analysts Offer Predictions for Microsoft FY2027 Earnings

Microsoft Corporation (NASDAQ:MSFT) – Equities researchers at Erste Group Bank raised their FY2027 EPS estimates for shares of Microsoft in a research report issued to clients and investors on Monday, July 27th. Erste Group Bank analyst H. Engel now anticipates that the software giant will post earnings of $19.46 per share for the year, up from their previous estimate of $19.40. The consensus estimate for Microsoft’s current full-year earnings is $16.70 per share.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The business had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. During the same period in the prior year, the firm posted $3.65 earnings per share. The company’s quarterly revenue was up 17.7% on a year-over-year basis.

A number of other analysts have also weighed in on the stock. New Street Research cut their price objective on shares of Microsoft from $675.00 to $600.00 and set a “buy” rating on the stock in a research note on Thursday, April 30th. Deutsche Bank Aktiengesellschaft restated a “buy” rating on shares of Microsoft in a research report on Monday, July 20th. CLSA reaffirmed an “outperform” rating on shares of Microsoft in a report on Thursday. DZ Bank reaffirmed a “buy” rating on shares of Microsoft in a research report on Thursday, April 30th. Finally, Dbs Bank decreased their price objective on Microsoft from $678.00 to $573.00 in a report on Thursday, May 7th. Forty-two analysts have rated the stock with a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $555.76.

Microsoft Trading Down 0.7%

Microsoft stock opened at $390.54 on Thursday. The stock has a 50-day moving average of $396.43 and a two-hundred day moving average of $405.74. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The stock has a market cap of $2.90 trillion, a PE ratio of 23.25, a price-to-earnings-growth ratio of 1.20 and a beta of 1.13. Microsoft has a one year low of $349.20 and a one year high of $555.45.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s payout ratio is 21.67%.

Insiders Place Their Bets

In related news, EVP Takeshi Numoto sold 4,500 shares of the business’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the transaction, the executive vice president directly owned 47,468 shares in the company, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of the stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 23,762 shares of company stock valued at $10,508,361 in the last 90 days. 0.03% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently bought and sold shares of the stock. Longfellow Investment Management Co. LLC grew its holdings in shares of Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after purchasing an additional 20 shares during the last quarter. Bernzott Capital Advisors purchased a new stake in Microsoft in the 4th quarter valued at approximately $34,000. Frankly Finances LLC purchased a new position in Microsoft in the second quarter worth $35,000. Timmons Wealth Management LLC purchased a new position in shares of Microsoft in the 4th quarter valued at about $36,000. Finally, Fairway Wealth LLC lifted its position in shares of Microsoft by 287.0% during the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after acquiring an additional 66 shares during the period. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings and cloud growth: Microsoft reported quarterly revenue of approximately $90.0 billion, up 17.7% year over year and above the $87.6 billion consensus estimate. Adjusted earnings per share of $4.74 also exceeded expectations of roughly $4.24. Azure revenue rose 43%, ahead of forecasts, and Azure surpassed $100 billion in annual revenue. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: AI monetization is gaining traction: Microsoft said Copilot exceeded 30 million paid seats, while growing Azure and Microsoft 365 usage suggested that AI demand is translating into higher cloud consumption and subscription revenue. Management also highlighted expanding AI capacity and a large commercial backlog. Meta tanks, Microsoft jumps as the AI trade splits Big Tech
• Positive Sentiment: Capital-spending concerns eased: Microsoft kept its AI capital-expenditure outlook broadly unchanged, unlike Alphabet’s recent upward revision, and emphasized that GPU spending can be moderated if demand cools. The company is also extending data-center lifespans to reduce buildout costs. Goldman Sachs raised its Microsoft price target to $640, while Citizens JMP reiterated its Market Outperform rating. Microsoft keeps capex forecast unchanged
• Neutral Sentiment: Key issue remains AI returns: Microsoft continues to spend heavily on data centers and AI infrastructure, so investors will monitor margins, free cash flow and the pace at which Copilot converts users into profitable consumption. The company’s first-quarter fiscal 2027 revenue guidance of $89.9 billion to $91.0 billion was slightly above consensus. Microsoft beats Wall Street expectations
• Negative Sentiment: Regulatory and competitive risks persist: U.K. regulators are investigating Microsoft’s Microsoft 365 subscription marketing, while Disney reportedly plans to replace GitHub Copilot with OpenAI’s Codex. These developments are unlikely to outweigh the earnings strength today but could pressure monetization and reputation over time. UK investigates Microsoft over 365 subscriptions

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).