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As Microsoft prepares to announce its financial results for the fiscal third quarter after the market closes on Thursday, analysts are eager to see if the tech giant can maintain its momentum.
Here's what analysts are expecting, according to LSEG:
- Earnings per share: Expected at $2.82
- Revenue: Expected at $60.80 billion
This suggests a 15.0% year-over-year revenue growth, slightly higher than the 14.5% forecast Microsoft gave in January. Analysts revised their projections after technology industry researcher Gartner reported a 0.9% increase in PC shipments during the quarter, factoring in sales of Windows operating system licenses to PC makers.
However, there are concerns about the growth of Azure cloud services. Analysts polled by CNBC anticipate a slowdown to 28.8% growth, compared to 30% in the previous quarter. The StreetAccount consensus for Azure growth is slightly lower, at 28.6%.
During the quarter, Microsoft introduced Surface PCs featuring a key for quick access to the Copilot chatbot. Additionally, the company began offering access to Copilot for small businesses with Microsoft 365 subscriptions, and welcomed Mustafa Suleyman, co-founder of DeepMind, to lead a new Microsoft AI group.
“We have been operating with speed and intensity and this infusion of new talent will enable us to accelerate our pace yet again,” CEO Satya Nadella wrote in a memo about the Inflection deal, reportedly worth $650 million.
This marks the first full quarter for sales of the Copilot add-on for commercial Microsoft 365 customers. In a note on Sunday, analysts at Piper Sandler cautioned clients not to expect many financial details from Microsoft.
Despite concerns, Microsoft's stock is up 4% this year, while the S&P 500 index has gained about 5%.
Executives will discuss the results and issue guidance on a conference call with analysts starting at 5:30 p.m. ET.
As Microsoft gears up to unveil its fiscal third-quarter results, analysts are closely monitoring the tech giant's performance. While expectations are high, concerns about the growth of Azure cloud services persist. Microsoft's ability to maintain its momentum in key areas like cloud services and AI will be closely scrutinized as it navigates the evolving tech landscape.
