• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

Microsoft Q4 earnings preview: Revenue poised for 14% growth, driven by Azure and Office strength

by July 18, 2024
written by July 18, 2024

As Microsoft Corp (NASDAQ) prepares to announce its fiscal fourth-quarter earnings on Tuesday, July 30, Wall Street analysts are optimistic about the company’s performance.

Microsoft is expected to report strong revenue growth, driven by its Azure cloud services and Office suite, with a projected earnings per share (EPS) of $2.90.

Analysts from Bank of America (BofA) see potential upside in Microsoft’s revenue, highlighting the strength of its key segments.

What does the Wall Street think of Microsoft?

Wall Street analysts forecast Microsoft to post Q4 revenue of $64.2 billion, representing a 14% year-over-year increase.

This growth is largely attributed to the robust performance of Azure and the Office suite, particularly the premium E3 and E5 subscriptions.

The expected EPS of $2.90 underscores Microsoft’s consistent profitability and effective cost management.

BofA analysts project a 1% upside to their revenue estimate of $64 billion, driven by sustained demand for Azure services and an improving PC and Windows environment.

The slight variance in estimates reflects differing views on the impact of emerging technologies and market conditions on Microsoft’s performance.

Azure’s growth driven by AI and core workloads

Azure, Microsoft’s cloud computing platform, remains a critical growth driver for the company. BofA analysts forecast Azure’s growth at 31.5%, up from their base estimate of 30.5%.

This increase is attributed to the platform’s balanced performance across artificial intelligence (AI) and core workloads.

AI continues to be a significant focus for Azure, with enterprises increasingly adopting AI solutions to enhance their operations.

This trend is expected to sustain Azure’s growth momentum, reinforcing Microsoft’s leadership in the cloud services market.

The previous quarter saw Intelligent Cloud, the segment encompassing Azure, achieve a 21% revenue increase, with operating income rising by 32% due to Azure’s expansion.

Office suite and Copilot traction

Microsoft’s Office suite, particularly the premium E3 and E5 subscriptions, is another major contributor to the company’s revenue growth.

BofA analysts anticipate early traction of Microsoft’s Copilot—a generative AI tool integrated into Office applications—will further accelerate growth.

This innovation is poised to enhance productivity and user experience, thereby maintaining the current revenue multiple for Office products.

The Copilot tool leverages AI to assist users with tasks such as drafting emails, generating documents, and analyzing data, which can significantly boost productivity.

This value proposition is likely to drive higher adoption rates, contributing to Microsoft’s top-line growth.

More personal computing and PC market stabilization

In the More Personal Computing (MPC) segment, Microsoft is expected to report $15.5 billion in revenue, with BofA analysts projecting a $50 million upside due to stronger-than-expected PC shipments.

The PC market, which experienced a downturn during the pandemic, is showing signs of stabilization. This recovery supports Microsoft’s sales of Windows licenses and other related products.

The normalization of PC buying patterns is a positive indicator for Microsoft’s MPC segment. As businesses and consumers continue to upgrade their systems, the demand for Windows operating systems and other personal computing products is expected to remain steady.

BoFA analysts see double-digit revenue growth

Looking ahead to fiscal 2025, BofA analysts anticipate continued double-digit revenue growth for Microsoft, driven by sustained strength in Azure and Office products.

However, they also expect a 100 basis point decrease in margins due to increased capital expenditures (capex) driving higher costs of sales. This investment is crucial for expanding Microsoft’s AI capabilities and cloud infrastructure.

The analysts see potential for the Office business to achieve 20% growth by Q1 fiscal 2026, supported by the ongoing adoption of premium subscriptions and AI-driven enhancements.

This optimistic outlook reflects confidence in Microsoft’s ability to capitalize on emerging technological trends and maintain its competitive edge.

MSFT stock performance and valuation

Microsoft shares traded at approximately $440 on Wednesday, reflecting strong investor confidence in the company’s growth prospects.

Source: TradingView

The BofA analysts reiterated their ‘Buy’ rating for Microsoft and raised their price target to $510 from $480, citing the potential for higher Office growth in fiscal 2025.

They believe the current share price reflects a fair amount of near-term upside, given the robust performance and strategic positioning of Microsoft’s key business segments.

The stock’s performance has been bolstered by the company’s consistent execution and strategic investments in growth areas such as cloud computing and AI.

Microsoft’s ability to deliver strong financial results amidst macroeconomic uncertainties underscores its resilience and adaptability.

Focus on AI and strategic investments

Microsoft’s strategic focus on AI and cloud computing is a cornerstone of its growth strategy. The company’s Intelligent Cloud segment, which includes Azure, is projected to achieve growth between 19% and 20% in fiscal Q4, factoring in some impact from AI capacity availability.

This cautious outlook suggests a higher likelihood of meeting expectations, given the strong demand for AI and cloud services.

In the previous quarter, Microsoft achieved a 21% revenue increase in the Intelligent Cloud segment, with operating income rising by 32%. This growth trend underscores the importance of AI and cloud services in driving Microsoft’s long-term success.

The company’s investments in AI infrastructure and capabilities are expected to yield significant returns, reinforcing its leadership in the technology sector.

Microsoft’s fiscal Q4 2024 earnings report is poised to showcase strong revenue growth and consistent profitability, driven by the performance of Azure and the Office suite.

While the company faces challenges such as increased capex and margin pressures, its strategic focus on AI and cloud computing positions it well for sustained growth.

Investors will be closely watching the Q4 results for insights into Microsoft’s future growth trajectory and strategic initiatives.

With a robust outlook for fiscal 2025 and beyond, Microsoft remains a key player in the technology sector, well-positioned to capitalize on emerging trends and maintain its competitive edge.

The post Microsoft Q4 earnings preview: Revenue poised for 14% growth, driven by Azure and Office strength appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Long ALG: breaking downtrend with strong support reversal and impressive earnings growth and dividend yield
next post
Long BOX: breaking resistance at $26.70 with strong bullish momentum and solid financial performance

related articles

Asian markets close: Nikkei, Kospi down; Sensex closes...

May 19, 2025

Qualcomm unveils AI chips for data centres with...

May 19, 2025

Best crypto to buy now: Bitcoin Pepe leads...

May 19, 2025

JPMorgan cuts Netflix rating, citing balanced risk-reward post-rally;...

May 19, 2025

Bitcoin ETF open interest dips 5% to $29.47B...

May 19, 2025

US stocks slip in the red on Monday:...

May 19, 2025

Should Klarna IPO remain on watch list after...

May 19, 2025

Why this brokerage downgraded UnitedHealth’s rating to ‘hold’

May 19, 2025

Nvidia opens NVLink Fusion ecosystem, expands Taiwan footprint...

May 19, 2025

Cathie Wood says Trump’s tariffs could unlock tech...

May 19, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Bitcoin Hits $88,000 All-Time High, Ethereum Surges 5.91%

    November 15, 2024
  • Nancy Pelosi to skip Trump inauguration ceremony: report

    January 16, 2025
  • Trump could face renewed ISIS threat in Syria as Turkey goes after US ally

    December 23, 2024
  • Kremlin suggests another US-Russia prisoner swap could be coming: report

    February 20, 2025
  • PepsiCo to buy tortilla chip maker Siete Foods for $1.2 billion

    October 2, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 4

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (4,728)
  • Investing (624)
  • Stock (774)

Latest Posts

  • Trump declares ‘America is back’ in speech before Congress

    March 5, 2025
  • Republicans hammer Biden’s ‘No one is above the law’ claim following Hunter pardon: ‘Aged like fine milk’

    December 2, 2024
  • Trump picks former Florida Rep. Dr. Dave Weldon as director of CDC

    November 23, 2024

Recent Posts

  • Putin’s ‘Fog of War’ missile confuses experts, but that’s his plan

    November 26, 2024
  • Victims react to new intelligence community report that Havana Syndrome could be caused by a foreign actor

    January 14, 2025
  • China unveils world’s largest amphibious warship

    December 27, 2024

Editor’s Pick

  • U.S. Steel CEO appeals to Trump after Biden blocks deal with Japanese firm

    January 8, 2025
  • Trump tapping 2 House Republicans for future admin fuels concerns about slim majority

    November 12, 2024
  • Harris campaign ‘internal worries about cohesiveness’ surface: report

    August 29, 2024
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock