Microsoft (NASDAQ:MSFT) Announces Earnings Results

Microsoft (NASDAQ:MSFT) posted its quarterly earnings data on Wednesday. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.24 by $0.50, FiscalAI reports. The company had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.Microsoft’s revenue for the quarter was up 17.7% compared to the same quarter last year. During the same period in the previous year, the business earned $3.65 EPS.

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

• Record fiscal year: Microsoft reported fiscal-year revenue above $331 billion, up 18%, with Microsoft Cloud revenue exceeding $214 billion and Azure surpassing $100 billion after growing 41%.
• Azure and AI demand remained exceptionally strong: Azure and other cloud services revenue rose 43%, while customer demand continued to exceed available capacity. Microsoft expects Azure growth of approximately 45% in constant currency in the first quarter, with first-half growth accelerating.
• AI monetization is broadening: Paid Microsoft 365 Copilot seats surpassed 30 million, GitHub Copilot reached 50 million users, and Foundry exceeded 100,000 customers. Microsoft is adding usage-based billing and premium offerings such as E7 to expand revenue beyond traditional per-seat licensing.
• Microsoft is heavily investing in AI infrastructure: Quarterly capital expenditures reached $41 billion, with more than $50 billion expected in the first quarter and approximately $175 billion projected for fiscal 2027 after a lease-accounting reclassification. Management said efficiency gains, pricing, and model diversification should help protect returns and margins.
• PC, gaming, and some legacy businesses face pressure: More Personal Computing revenue declined 4%, Xbox revenue fell 10%, and Microsoft expects Windows OEM and devices revenue to decline in the low 20s in the first quarter. Management also expects fiscal 2027 revenue declines in Windows OEM and devices and mid-single-digit declines in certain on-premises server and product businesses.

Microsoft Price Performance

MSFT stock traded up $54.97 during trading hours on Thursday, hitting $445.51. 54,070,797 shares of the stock traded hands, compared to its average volume of 37,162,672. The company has a current ratio of 1.28, a quick ratio of 1.27 and a debt-to-equity ratio of 0.08. The stock has a 50-day simple moving average of $396.43 and a 200 day simple moving average of $405.74. Microsoft has a one year low of $349.20 and a one year high of $555.45. The company has a market cap of $3.31 trillion, a P/E ratio of 26.51, a P/E/G ratio of 1.20 and a beta of 1.13.

Microsoft Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s payout ratio is currently 21.67%.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth exceeded expectations. Azure revenue rose 43% year over year, ahead of analysts’ roughly 40% forecast, and surpassed $100 billion in annual revenue. Intelligent Cloud revenue increased 32% to $39.3 billion, easing concerns that Microsoft’s AI infrastructure spending is outpacing customer demand. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: Microsoft beat on revenue and earnings. Fiscal fourth-quarter revenue reached $90.01 billion, up 17.7% year over year and above the $87.62 billion consensus estimate. Adjusted EPS of $4.74 exceeded expectations of $4.24, while net income increased approximately 31%. First-quarter fiscal 2027 revenue guidance of $89.9 billion to $91.0 billion was also above consensus. Microsoft fiscal fourth-quarter earnings
• Positive Sentiment: AI monetization showed further traction. Microsoft said Copilot surpassed 30 million paid seats, while management emphasized a future model combining subscriptions with usage-based consumption. The company also reported that AI demand continues to outpace capacity, supporting its long-term Azure outlook. Microsoft and Meta AI earnings reaction
• Positive Sentiment: Capital-spending concerns moderated. Microsoft held its AI capital-expenditure outlook steady and said GPU spending can be slowed if demand weakens. Extending data-center useful lives may also reduce depreciation pressure. The results prompted multiple analyst price-target increases, including BMO’s move to $515 and Goldman Sachs’ reported target of $640. Microsoft holds AI capital spending forecast
• Neutral Sentiment: Broader market conditions remain unsettled. The Federal Reserve held interest rates unchanged, but elevated inflation and a hawkish policy tone could continue to pressure high-growth technology valuations. Microsoft’s results helped lift technology and semiconductor shares. Market factors affecting stocks
• Negative Sentiment: Cloud-security and regulatory risks remain. Alphabet-owned Wiz disclosed a vulnerability that could have exposed Microsoft cloud customers, while U.K. regulators are investigating whether Microsoft misled customers about Microsoft 365 subscription options. These issues could create reputational, compliance, or remediation costs. Wiz cloud vulnerability report

Analyst Upgrades and Downgrades

Several equities research analysts have recently weighed in on MSFT shares. Mizuho dropped their target price on shares of Microsoft from $515.00 to $490.00 and set an “outperform” rating for the company in a research report on Wednesday, July 15th. BNP Paribas Exane decreased their target price on Microsoft from $556.00 to $555.00 and set an “outperform” rating for the company in a research report on Friday, May 1st. Sanford C. Bernstein set a $647.00 price target on Microsoft in a research report on Thursday. TD Cowen reaffirmed a “buy” rating and issued a $540.00 price objective on shares of Microsoft in a report on Thursday, June 4th. Finally, Piper Sandler increased their target price on shares of Microsoft from $540.00 to $550.00 and gave the stock an “overweight” rating in a report on Tuesday. Forty-two investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat.com, Microsoft presently has a consensus rating of “Moderate Buy” and a consensus price target of $556.20.

Insider Activity at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 4,500 shares of the stock in a transaction on 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 of the company’s stock, valued at $19,122,009.12. This represents a 8.66% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of the stock in a transaction dated 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 transaction, the chief executive officer directly owned 110,477 shares in the company, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 23,762 shares of company stock valued at $10,508,361. Insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the business. Longfellow Investment Management Co. LLC increased its holdings in shares of Microsoft by 51.3% during the 2nd 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 period. Bernzott Capital Advisors bought a new stake in shares of Microsoft in the 4th quarter worth approximately $34,000. Timmons Wealth Management LLC bought a new stake in shares of Microsoft during the fourth quarter valued at approximately $36,000. LSV Asset Management acquired a new position in shares of Microsoft in the fourth quarter valued at $44,000. Finally, University of Illinois Foundation bought a new position in Microsoft in the second quarter worth $50,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Microsoft Company Profile

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).