TLDR
- MSFT stock rose 1% in early premarket trading before Microsoft’s fiscal fourth-quarter earnings report.
- Analysts expect quarterly revenue of $87.63 billion and adjusted earnings of $4.22 per share.
- Investors will closely watch Microsoft’s planned $190 billion capital spending for calendar year 2026.
- Azure growth remains a major focus after cloud revenue increased 40% in the previous quarter.
- Microsoft 365 Copilot subscription growth will be monitored following reports of slow adoption.
Microsoft (MSFT) shares rose 1% in early premarket trading on Wednesday as investors prepared for the company’s fiscal fourth-quarter results after the closing bell. The report will test whether cloud demand can offset concerns over high spending and rising competition.
Analysts expect Microsoft to report revenue of $87.63 billion, up 15% from a year earlier. Adjusted earnings are projected at $4.22 per share, also up 15%. That revenue growth would be the slowest in five quarters.
MSFT Stock Gains Before Earnings Report
MSFT stock has faced a difficult year despite its July recovery. The shares fell 23% during the first half of 2026, marking their weakest half-year performance since 2000. The stock remains down 18.3% this year.
Microsoft faces competition from Google, Anthropic, OpenAI, and other cloud providers. Heavy spending on data centers and AI systems has added to concerns.
Capital Spending Plans Draw Attention
Microsoft has forecast $190 billion in capital spending for calendar year 2026. Investors will watch fourth-quarter spending and any changes to the company’s full-year outlook.
Alphabet recently raised its spending forecast after reporting faster cloud growth. Evercore ISI analyst Mark Mahaney said that move increased the chance that Microsoft and Amazon could follow with higher spending plans.
Microsoft, Amazon, and Meta shares fell last week after Alphabet lifted its capital expenditure forecast, even as Google reported stronger cloud sales.
Azure Growth Faces Higher Benchmark
Azure growth will remain a focus in the earnings report. Microsoft said Azure and other cloud services grew 40% in its fiscal third quarter.
Google Cloud sales rose 82% in its latest quarter, setting a benchmark for cloud companies. Investors will compare Microsoft’s growth rate with that result and watch for updates on AI demand.
Microsoft 365 Copilot adoption will receive attention. The company’s workplace AI product has shown slower subscription growth than some investors expected.
Job Cuts Add to Cost Focus
Microsoft has reduced staff across business units. The company cut about 3,200 Xbox jobs this month and announced plans to sell or spin off five game studios.
In June, Microsoft eliminated 6,000 roles, about 4% of its workforce. Most cuts affected product and engineering teams.
Koyfin data shows 50 of 53 analysts rate MSFT stock as Buy or higher. The average price target stands at $555.77, about 41% above Tuesday’s closing price.
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