- Ives believes that Wall Street is still underestimating Microsoft’s growth trajectory going forward.
- Morgan Stanley analyst Keith Weiss said Microsoft remains best positioned as chief investment officers of companies prioritize GenaAI
- According to the Fiscal.ai-compiled consensus, Microsoft is expected to report EPS of $3.67 and revenue of $75.36 billion.
Ahead of software giant Microsoft Corp.’s (MSFT) fiscal first-quarter earnings report, which is due after the market close on Wednesday, an analyst said he looks forward to “robust results.”
Microsoft stock has gained over 24% so far this year, outperforming the broader market and the tech sector, although the rise trailed the red-hot pace of some of its mega-cap tech peers.
MSFT In Midst of Hitting Next AI Monetization Phase: Analyst
In a note released Wednesday, Wedbush analyst Daniel Ives said he expects another strong earnings/outlook next week, further validating the Microsoft artificial intelligence (AI) growth story for the fiscal year 2026. “We believe Microsoft is in the midst of hitting its next phase of monetization on the AI front and more enterprises are accelerating their AI budgets and strategic footprint.”
Ives believes that the Street is still underestimating Microsoft’s growth trajectory going forward. He views the Satya Nadella-led company as the clear frontrunner in enterprise hyper-scale AI, despite growing competition from Amazon’s AWS and Google’s GCP.
The tech analyst said, “Our thesis remains that the cloud and AI monetization are going to comprise a larger piece of Redmond going forward and will ultimately spur growth and margins over the coming years.”
Wedbush has an ‘Outperform’ rating and $625 price target for Microsoft.
What Street Expects From MSFT’s Q1 Print
According to the Fiscal.ai-compiled consensus, Microsoft is expected to report earnings per share (EPS) of $3.67 and revenue of $75.36 billion. This compares to the year-ago’s $3.3 in EPS and $65.58 billion in revenue.
In a note released earlier this month, Morgan Stanley analyst Keith Weiss said Microsoft remains best positioned as chief investment officers of companies prioritize generative AI (GenAI). Microsoft’s key secular themes, its deep integrations across the software ecosystem, vast scope of products to monetize GenAI across its broad portfolio and installed base, and significant and increasing AI infrastructure investments place it in good standing, the analyst said.
Retail’s Waning Confidence In MSFT Stock
Stocktwits’ retail users held a grim view of a stock, with the sentiment remaining ‘bearish’ for about a month now. The message volume on the Microsoft Stream remained ‘normal.’
Most users holding a muted view of the Microsoft stock premised their worries on factors extraneous to the company. “Market is inflated…Don’t catch [a] falling knife,” one of them said.
However, a bullish user said Microsoft is still the “king of consistency.”
Microsoft stock has traded in a 52-week range of $344.79-$555.45, with the upper end being the intraday peak hit on July 31. The average analyst’s price target for the stock is $621.27, according to Koyfin, implying upside potential of about 20%.
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