Microsoft (MSFT) is set to report its fiscal third-quarter results on April 29. Although the stock has recovered some recent losses as big tech shares rallied, it remains about 12% lower for the year, pressured by heavy spending on AI infrastructure and rising competition. For Q3, analysts expect Microsoft to report earnings per share (EPS) of $4.06 on revenue of $81.3 billion, up from $3.46 per share and $70.1 billion in the same period last year. According to TipRanks’ Options Tool, options traders expect an 7% move in either direction in MSFT stock in reaction to Q3 FY26 earnings.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
For context, Microsoft develops software, cloud services, and AI solutions, including Windows, Office, Azure, and AI tools like Copilot, serving businesses and consumers worldwide.
What to Expect from Microsoft’s Q3 Results
Even though revenue and profits are expected to grow year over year, investors will be closely watching Microsoft’s AI spending plans. The key question is no longer whether Microsoft can benefit from AI demand, but how long it will take for those heavy AI investments to start paying off.
Overall, Azure remains the most important metric, as investors want proof that cloud growth is staying strong while Microsoft continues to spend heavily on AI infrastructure. Copilot is another key focus, as investors are looking for signs that its AI products are generating real business value. Below is a screenshot showing Microsoft’s operating income breakdown across segments over the last few quarters.
Analysts Stay Bullish on MSFT Ahead of Earnings
Most recently, TD Cowen analyst Derrick Wood repeated his Buy rating on MSFT. He believes Microsoft’s Office 365 business will grow faster because more companies are expected to start using Copilot, the company’s AI assistant.
Wood also pointed to new product bundles and pricing plans, like the upcoming E7 package and Copilot Cowork offering, which could encourage more customers to pay for Copilot. Over time, this should help Microsoft earn more revenue from each customer.
Meanwhile, Evercore analyst Kirk Materne said investor sentiment around Microsoft could improve this quarter, but unless Azure growth comes in much stronger than expected, the earnings report will likely be more about staying on track than creating major excitement. Materne added that it would be “good enough” if Microsoft reports Q3 FY26 Azure growth at the higher end of its guidance, around 38% or more, especially since the company faces tough comparisons from the previous quarter.
He reiterated his Buy rating on Microsoft stock with a $580 price target.
Is Microsoft a Good Stock to Buy Now?
Analysts remain overwhelmingly bullish on Microsoft stock. Of the 34 analysts tracked by TipRanks, 32 have issued Buy ratings, while only two rate the stock as Hold. Their average price target of around $570.15 implies 34.2% upside from current levels, suggesting a potential full recovery to new highs over the next 12 months.
