Wall Street’s Earnings Outlook for Microsoft (MSFT) Stock Today

TLDR

• Microsoft is scheduled to announce its fiscal Q3 2026 earnings after the market closes on Wednesday.
• Analysts are forecasting earnings per share of $4.05 and revenue totaling $81.4 billion.
• The crucial figure to monitor is Azure cloud revenue growth, anticipated to be 39.7%.
• Capital expenditure is projected to reach $37.5 billion, almost twice the $21.4 billion from the same quarter last year.
• MSFT shares have declined approximately 10-12% this year, marking the weakest performance within the Magnificent 7.

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(SeaPRwire) –   Microsoft will release its fiscal third-quarter results after the close of trading Wednesday, with significant expectations. The company’s stock has fallen about 10-12% in 2026, positioning it as the poorest performer among the Magnificent 7 stocks.

Microsoft Corporation, MSFT

According to FactSet surveys, analysts predict adjusted earnings will be $4.05 per share on revenue of $81.4 billion. This represents an increase from $3.46 per share on $70.1 billion in the year-ago quarter.

The market has shown tolerance for major tech companies’ investments in artificial intelligence, but that tolerance is now diminishing.

Microsoft has allocated $120 billion for capital expenditure this year to develop its AI infrastructure. For the third quarter specifically, analysts forecast capital spending of $37.5 billion—a significant jump from $21.4 billion in the third quarter of the previous year.

The free cash flow narrative is comparable. It is projected to be $15.4 billion, a decrease from $20.3 billion in the corresponding period last year. Investors are eager to see when these substantial investments will begin to yield returns.

Azure Growth Is the Number to Watch

Azure cloud revenue growth is the key performance indicator likely to influence the stock price. Wall Street anticipates growth of 39.7%, a marginal increase from 39% in the preceding quarter.

Falling short of this expectation could negatively impact the stock. Investors view cloud growth as the most direct indicator of demand for AI services.

In a note dated April 20, Deutsche Bank analyst Brad Zelnick highlighted that capacity limitations might constrain cloud growth. Demand is exceeding the available supply as the construction of servers and data centers continues. Zelnick maintains a Buy rating on MSFT with a $575 price target but believes capital expenditure growth may decelerate through fiscal 2027.

Copilot Monetization in Focus

Apart from cloud performance, investors are looking for advancements in Copilot monetization. Last quarter, Microsoft reported having 15 million paid Microsoft 365 Copilot seats, while total paid M365 Commercial seats exceeded 450 million.

Growth in seat count is a primary method for Microsoft to demonstrate it is converting its AI investments into tangible revenue.

A wider concern is also affecting the stock. Some investors fear that progress in AI technology could challenge the enterprise software market—Microsoft’s core business. The company must prove it is gaining from the AI trend rather than being threatened by it.

A positive development is the plan by consulting firm Accenture to deploy Microsoft’s Copilot to its entire workforce of 743,000 employees, serving as a solid example of enterprise-level adoption.

Investors will also scrutinize management’s remarks following Monday’s confirmation by Microsoft and OpenAI that their exclusive partnership has concluded.

Microsoft holds a consensus Strong Buy rating from 35 Wall Street analysts, comprising 33 Buy and 2 Hold recommendations. The average price target of $570.30 suggests potential upside of roughly 34% from the current stock price.