Technology giant Microsoft Corp (NASDAQ:MSFT) reports second-quarter financial results after market close on Tuesday, Jan. 30.
Here’s a look at the key earnings estimates, what analyst are saying and key items for investors to watch.
Earnings Estimates: Analysts expect Microsoft will report second-quarter revenue of $61.10 billion, according to data from Benzinga Pro.
The company reported revenue of $52.74 billion in last year’s second quarter. Microsoft has beaten revenue estimates from analysts in four of the last five quarters.
Analysts expect Microsoft to report second-quarter earnings per share of $2.78 compared to $2.32 in the prior year. The company has beaten earnings per share estimates from analysts in the last five straight quarters.
What Analysts Are Saying: The second-quarter earnings report from Microsoft could be one of the biggest items to kick off earnings season, according to Wedbush analyst Daniel Ives.
Ives, who has an Outperform rating and $450 price target on Microsoft, said Microsoft’s report could be the most important earnings of the season regardless of sector.
“The two torch bearers of the AI Revolution are the Godfather of AI Jensen and Nvidia with Nadella and Richmond the foundational Cloud start for AI use cases around the world now exploding with Microsoft’s earnings Tuesday after the bell a key barometer for the pace of AI spending,” Ives said.
Ives said the second quarter could be strong for Microsoft based on an acceleration of its Cloud deals for Azure.
“We would expect a solid beat for the December quarter with Nadella & Co. likely exceeding the Street’s top-line revenue of $61 billion and EPS of $2.77. The most important metric will be Azure growth.”
Ives said fiscal 2024 presents strong AI use cases for Microsoft and others, but it is fiscal 2025 that “remains the true inflection year of AI growth.”
“We believe the stock still has yet to price in what we view as the next wave of Cloud and AI growth coming to the Redmond story with FY24 with a strong competitive cloud edge vs. Amazon and Google.”
Ives said the growth of ChatGPT growth for Microsoft is just beginning to hit “its next gear.”
“In a nutshell, we view this as Microsoft’s ‘iPhone Moment’ with AI set to change the cloud growth trajectory in Redmond the next few years.”
Here’s a look at other…
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