Reasons to Be Optimistic About the Stock Ahead of Q3 Earnings

Microsoft Q3 Earnings Preview: Strong AI Investments and Positive Analyst Outlook Ahead of October 29 Report

  • Microsoft Corporation will report its Q3 earnings on October 29, with analysts expecting an EPS of $3.65.
  • In Q4 FY25, Microsoft posted revenue of $76.4 billion and an EPS of $3.65, both exceeding last year’s figures.
  • Microsoft continues to invest heavily in AI, including new voice-activated features for Copilot on Windows.
  • The company committed up to $29.4 billion combined to secure AI cloud computing capacity with CoreWeave and Nebius.
  • Nearly all analysts surveyed by CNN recommend buying MSFT stock, which is near its 52-week high and above its 200-day moving average.

Microsoft Corporation is set to release its third-quarter earnings report on October 29 after the market closes. Investors and analysts are watching closely for the company’s performance and its potential effect on share prices. This year, MSFT has gained 23%, showing solid but not leading growth compared to other major tech stocks.

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For the fourth quarter of fiscal year 2025, Microsoft delivered revenue of $76.4 billion, up 18% from the previous year. Operating income rose 23% to $32.4 billion, and earnings per share (EPS) reached $3.65, representing a 24% increase year-over-year. According to Zacks Investment Research, analysts forecast an EPS of $3.65 for the upcoming quarter, matching last quarter’s report. The company has surpassed earnings expectations in its last 10 quarters, a trend that has historically boosted its stock price.

Microsoft is focusing heavily on Artificial Intelligence (AI), particularly by upgrading its Copilot AI assistant for Windows. The new version includes voice activation through the phrase “Hey Copilot,” allowing users to interact with the assistant hands-free. This feature has stimulated positive investor sentiment, driving shares up by several percentage points following the announcement.

Additionally, the company recently revealed significant investments in AI cloud computing infrastructure. It plans to spend at least $10 billion with CoreWeave and up to $19.4 billion with Nebius to ensure ample computing resources for AI operations. These deals reinforce Microsoft’s position in the AI sector, where it competes against other large technology firms.

Currently, MSFT stock trades near the highest point in its past 52 weeks and remains above its 200-day simple moving average, an indicator of long-term stock health. According to a CNN analyst survey of 61 experts, 98% recommend purchasing Microsoft shares ahead of the upcoming earnings report.

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For more on semiconductor stocks, see Taiwan Semiconductor (TSM): Why TSMC is a Must-Buy Stock.

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