Microsoft maintains positive tone ahead of earnings report

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Anton Kharitonov

29.04.2026

Microsoft maintains positive tone ahead of earnings report — MSFT

The company will publish its Q3 2026 results on April 29 after the market close, making this one of the key events of the season for Nasdaq and Big Tech. The release overlaps with the Fed meeting and other major tech earnings, turning the day into a “super day” for markets, with Microsoft representing over 20% of the S&P 500 index.

MSFT has been under heavy pressure: the stock is down about 12% year‑to‑date despite 17% revenue growth and EPS of $4.14 in Q2. However, ahead of the report the price is once again approaching resistance near $435, keeping the chances of a breakout and further upside alive. At the same time, investors question whether AI‑related spending will translate into sustainable profit growth, so the market is looking not just for top‑line growth, but for concrete evidence that AI is generating real revenue and strengthening margins.

Microsoft plans capital expenditures of roughly $120 billion in fiscal 2026, including about $37.5 billion in a single quarter for AI infrastructure. Free cash flow is under pressure, and the focus is shifting from headline revenue growth to the quality of spending and return on investment (ROI). OpenAI has failed to meet internal revenue and user‑growth forecasts, adding caution to the broader AI narrative. Microsoft maintains its partnership, but terms and expectations are evolving; the market is more sensitive to the risk of slowing AI demand and overheated infrastructure spending.

Analysts broadly expect EPS around $4.04–4.07 and revenue near $81.3 billion, implying roughly +16% YoY growth. The real trigger will not be the absolute numbers—markets have already seen 17% revenue growth in Q2—but the forward guidance and comments on AI monetization. Azure remains the main driver: it grew about 39% in Q2, and the market wants to see that pace hold or improve. If growth slows, it could spark a sharp sell‑off regardless of overall revenue growth. Around 15 million paid Copilot users create a solid base, but the market is watching ARPU and the share of AI‑related operating expenses closely. Any sign that capex growth may moderate or be optimized would be taken positively.

Volatility of around 6–7% in either direction after the release is widely expected. Competition is intensifying as Google and Amazon ramp up AI spending, turning the infrastructure race into a key theme. The market will watch which players start monetizing AI applications and services faster. Short term, sentiment is nervous: investors are waiting for either a “beat + raise guidance” scenario or a clear disappointment, either of which could trigger a quick move. Medium term, the consensus is still bullish, with about 32 of 34 analysts recommending a buy and an average target around $570, conditional on strong AI‑ROI.

In a bullish scenario, strong Azure figures, clear AI‑revenue growth, and a message of controlled capex could push the stock toward year‑highs and levels near $570 and higher. In a bearish scenario, weak cloud growth or cautious guidance, a slowdown in Azure, or rising worries about AI‑ROI could trigger a 5–10% drop and a test of lower levels. The base case is numbers in line with expectations but no clear AI breakthrough, leading to consolidation in the $430–480 range with high volatility.

Strategy‑wise, Microsoft is no longer just a cloud company: it is now a bet on AI infrastructure, hyperscale data centers, and long‑term monetization of AI‑driven applications. The market’s central question is whether the AI‑cycle will justify $100+ billion of capex and whether Azure and AI‑services can support the stock’s rich valuation. Today, Microsoft sits at the intersection of high expectations and rising risks from both spending and macro factors. The key will be the quality of growth—Azure growth rates, AI‑revenue momentum, and how well the company manages capex and margins—will define the next phase of MSFT’s valuation.

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