Microsoft (MSFT) stock is in negative territory early Wednesday after the tech giant disclosed its fiscal fourth-quarter earnings report. The results beat top- and bottom-line estimates, but the company's outlook fell short of expectations.
In the three months ended June 30, Microsoft's revenue increased 15% year-over-year to $64.7 billion, due in part to 29% growth in Azure and other cloud services. Its earnings per share (EPS) rose 9.7% from the year-ago period to $2.95.
"In our largest quarter of the year, we again delivered double-digit top and bottom-line growth with continued share gains across many of our businesses and record commitments to our Microsoft Cloud platform," Microsoft Chief Financial Officer Amy Hood said in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Wall Street was anticipating revenue of $64.4 billion for Microsoft's fiscal Q4 and earnings of $2.93 per share, according to CNBC.
However, sentiment turned negative toward Microsoft for two reasons. One is that its year-over-year revenue growth fell short of the 31% increase Wall Street was expecting. Additionally, the company's revenue outlook of $63.8 billion to $64.8 billion for its fiscal 2025 first quarter is below the $65.2 billion estimate from analysts. MSFT added that it anticipates full-year revenue growth in the double-digits.
Is Microsoft stock a buy, sell or hold?
Wall Street is bullish on the Dow Jones stock, and for good reason. Indeed, shares are up more than 23% in the past 12 months. What's more, MSFT has been one of the best buy-and-hold bets for long-term investors.
According to S&P Global Market Intelligence, the average analyst target price for MSFT stock is $498.07, representing an upside of roughly 20% to current levels. Plus, the consensus recommendation is Strong Buy.
Financial services firm Oppenheimer is one of the more bullish outfits on the blue chip stock with a Buy rating and $500 price target.
Microsoft is "one of the world's leading platform tech companies, with large franchises in Cloud (Azure), business productivity (Office), personal computing (1.4 billion Windows users), gaming (Xbox), and communications (Teams)," says Oppenheimer analyst Timothy Horan. "Now, artificial intelligence (AI) is improving all the above."
Horan adds that the cloud industry remains only 30% penetrated, even as it grows 20% each year. And MSFT "is especially well positioned for enterprise AI adoption" in the cloud space "due to its large entrenched customer base and infrastructure."
Related Content
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
- Earnings Calendar and Analysis for This Week
- The Best Large-Cap Stocks to Buy
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
2026 Disney Dining Plan Returns: Free Dining for Kids & Resort BenefitsPlan your 2026 Walt Disney World vacation now. Learn about the returning Disney Dining Plan, how kids aged three to nine eat free, and the exclusive benefits of staying at a Disney Resort hotel.
-
Stock Market Today: Stocks Soar on China Trade Talk Hopes
Treasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Can Trump Fire Powell? A Supreme Court Case Could DecidePresidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
-
What Are AI Agents and What Can They Do for You?AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
-
Should You Buy an iPhone Now Before Tariffs Hit?Looming tariffs can make an iPhone purchase seem urgent. Here's what to do if you need another phone but want to save money.
-
SRI Redefined: Going Beyond Socially Responsible InvestingNow that climate change has progressed to a changed climate, sustainable investing needs to evolve to address new demands of resilience and innovation.
-
Here's When a Lack of Credit Card Debt Can Cause You ProblemsUsually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
-
33 Stocks That Could Rally 50% or More This YearAnalysts say these S&P 500 stocks have at least 50% price upside over the next year or so.
