Microsoft Corporation (MSFT) is expected to report its Q3 earnings on October 29 after market close. Analysts are closely watching how the report will impact its stock, hoping to see a rally. Currently, MSFT is up 23% this year, not a top performer compared to other Magnificent-7 stocks, but still a solid return. Should the earnings exceed expectations, shares in Microsoft could soar, making MSFT a contender to invest in now.
Microsoft reported Q4 FY25 revenue of $76.4B (+18% YoY), operating income of $32.4B (+23% YoY), and EPS of $3.65 (+24% YoY), all ahead of expectations. According to Zacks Investment Research, based on 16 analysts’ forecasts, the consensus EPS forecast for the upcoming quarter is $3.65. The reported EPS for the same quarter last year was $3.3. Microsoft has beaten expectations in its last 10 earnings reports, with each instance of that sending the stock higher. With shares currently at $520, MSFT stock could boom further to a new ATH should the next earnings exceed forecasts.
Despite being behind Alphabet (GOOGL) and Meta Platforms in the race to dominate AI-driven consumer tools, Microsoft is now betting big on its own operating system. The recent updates for Copilot on Windows could elevate Microsoft into a leader in AI, all while investing in itself. Microsoft has enabled voice activation for Copilot, allowing users to launch the AI assistant using the phrase “Hey Copilot.” This new opt-in feature brought on bullish investor sentiment, with shares rising a few percentage points following the announcement.
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“We believe this shift to conversational input will be as transformative as the mouse and keyboard in terms of unlocking new capabilities on the PC for the broadest set of people,” Microsoft executive vice president and consumer chief marketing officer Yusuf Mehdi said in a statement. Furthermore, Microsoft announced earlier this month that it is spending at least $10 billion with CoreWeave and up to $19.4 billion with Nebius to secure computing capacity for its artificial intelligence operations. These AI cloud deals further stabilize Microsoft in the AI spotlight, an area that stocks like MSFT have thrived in in 2025.
Microsoft (MSFT) is currently trading near the top of its 52-week range and above its 200-day simple moving average. Per CNN analysts, the stock is a strong buy, with 98% of 61 analysts surveyed by the platform suggesting buying the stock now, prior to its upcoming earnings.