Microsoft (NASDAQ:MSFT) will release quarterly earnings after the market closes on Thursday, April 25. Wall Street remains upbeat on this tech giant ahead of its Q3 results. Artificial intelligence (AI)-led tailwinds are expected to propel MSFT’s Cloud business and its overall financials.
As MSFT is well-positioned to deliver solid growth, let’s delve into the Street’s consensus estimates for its upcoming earnings.
MSFT – Q3 Expectations
Wall Street expects Microsoft to post revenue of $60.83 billion in Q3, up 15% from $52.9 billion in the prior-year quarter. Strong demand for Microsoft’s cloud offerings, including AI services, is expected to boost its top-line growth. Moreover, ongoing momentum in the Microsoft 365 product suite will likely drive its average revenue per user.
Higher revenues and improved operating leverage through cost control measures are expected to cushion MSFT’s Q3 bottom line. Analysts forecast MSFT to report earnings of $2.81 per share, up from $2.45 in the year-ago quarter.
Is Microsoft Stock Expected to Rise?
Microsoft stock has gained nearly 46% in one year. Moreover, analysts’ average price target suggests decent upside potential from current levels. Goldman Sachs analyst Kash Rangan reiterated a Buy on MSFT stock on April 21. The five-star analyst expects Microsoft to benefit from AI-driven tailwinds with continued strength in Azure (its Cloud business).
While Rangan is bullish on MSFT ahead of Q3 print, Wolfe Research analyst Alex Zukin is the most accurate analyst covering the stock in a one-year timeframe. Copying Zukin’s trades on MSFT stock and holding each position for one year could result in 97% of your transactions generating a profit, with an average return of an impressive 34.81% per trade.
Microsoft stock has a Strong Buy consensus rating based on 32 Buys, one Hold, and one Sell. Analysts’ average price target on MSFT stock is $477.41, implying 17.14% upside potential from current levels.
