Microsoft reports fiscal first-quarter results after the close on Wednesday, with investors looking for evidence that heavy AI investment is driving growth, and will disclose Azure revenue in dollars for the first time. Wall Street expects revenue of about $90.6 billion to $90.7 billion for the quarter ended September 30, up 16.6% from $77.67 billion, and EPS of $4.71 to $4.72 versus $4.13 a year earlier. The revenue consensus sits near the upper end of guidance of $89.85 billion to $90.95 billion. Microsoft has also moved to two reporting segments, Agents and Infra (about 81% of revenue and 88% of operating income based on recast fiscal 2026 figures) and Devices and Consumer. Capital expenditure including leases is expected to exceed $45.9 billion, up from $19.3 billion a year earlier, while remaining performance obligations stand at about $678 billion and recent price targets reach about $665.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
MSFTAI investmentearningscloud computing
Open a keyword to see other news on the same topic.
Related tickers and likely impact
MSFT
• NeutralMicrosoft
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/27/2026 | 531.60 |
| Change that session | -0.19% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Google, Microsoft, and Amazon have to justify the AI spending boom this week
Google, Microsoft and Amazon report quarterly earnings this week, and the key question is how well their AI spending pays off compared with expected returns. These companies, which lead a week of results accounting for more than a third of S&P 500 earnings, face the same scrutiny Meta faced. Bank of America said hyperscalers' 2027 capex estimates have already been revised up by nearly 90% year to date. Competition for capital is intensifying as AI labs prepare large IPOs and businesses scale back AI spending and use cheaper models, making it more important to justify AI costs.
- Alphabet and Microsoft Earnings Will Put Investors’ AI Stress to the Test
Alphabet and Microsoft, which together make up 11.5% of the S&P 500, report earnings after the bell on Wednesday, with analysts expecting revenue growth of 25.2% and 16.7%. Investors want evidence that heavy AI infrastructure spending will produce profit and cash flow, a concern heightened by Gartner's forecast that AI revenue will be insufficient to support profitable returns on all planned AI capex, with $6 trillion of spending expected from 2027 to 2030. Neocloud providers face the most pressure because they rely heavily on debt, and Meta shares fell 7% Thursday and another 1% Friday after its AI spending turned free cash flow negative. Alphabet reported negative free cash flow of $5.9 billion in the second quarter, while Google Cloud revenue rose 82% to $24.8 billion, Azure grew 43% to $37.8 billion, and Microsoft 365 Copilot passed 30 million paid users. Yorkville Ives estimates hyperscalers hold a $2 trillion cloud backlog and will spend more than $800 billion on AI in 2026.
- Microsoft’s $50 Billion Gamble: Can Microsoft’s Azure Growth Justify Its Exploding AI Budget?
Microsoft reports fiscal first-quarter results on Wednesday, October 28, after the close, and the article says the report will show whether Azure growth can keep pace with its AI spending. In the last quarter of fiscal 2026, revenue reached $90.01 billion, up 17.8%, while Azure grew 43% and passed $100 billion in annual revenue for the first time; commercial RPO rose 84% to $678 billion. Costs rose just as fast: quarterly capex hit $41 billion, and free cash flow fell 23.19% to $19.6 billion. Management guided first-quarter capex above $50 billion including lease reclassification, and expects Azure growth of about 45% in constant currency. The article also highlights Microsoft 365 Copilot passing 30 million paid seats and RPO rising 25% excluding OpenAI.
- 3 Key Things to Monitor When Tech Giants Report Earnings
The article highlights three factors to watch as Alphabet, Microsoft and Amazon report earnings: AI capital expenditure, revenue growth rates and management guidance. If hyperscalers keep ramping up spending, chipmakers could benefit. Micron posted 379% year-over-year revenue growth in its fiscal Q4 2026, while Google Cloud grew 82% in the second quarter, and the author prefers operating income over net income because large investments in SpaceX and Anthropic distort net results. Amazon reported a trailing 12-month cash outflow of $7.6 billion, mainly due to AI investments, compared with $18.2 billion in positive free cash flow for the 12 months ended June 30, 2025.
- Should You Buy This Trump AI Stock Ahead of Earnings?
Microsoft (MSFT) reports quarterly results on October 28 and ranks eighth in Trump's latest stock portfolio, after Trump bought the stock five times in August. Bulls point to Azure growth of 43% last quarter, with management expecting about 45% in the current quarter, and to demand that exceeds available computing capacity. Bears cite rising capital spending that Deutsche Bank says could push free cash flow close to breakeven in fiscal 2027, about two-thirds of spending going to short-lived equipment such as chips, and OpenAI making up about 45% of the commercial backlog in the December quarter. The stock trades at 26.75 times forward earnings, a 27% premium to the sector median of 21.01 but 12% below its own five-year average of 30.47, with a PEG ratio of 1.70 versus a sector median of 1.14. The article concludes that investors pay more than for the average tech stock but less than they usually pay for Microsoft.
- How Earnings Beat Will Impact Microsoft (MSFT) Stock
Microsoft reported strong quarterly results, with fiscal 2026 Azure revenue above US$100b and Q4 Azure growth of 43%, supported by heavy AI and cloud spending and offerings such as Copilot and first-party Maia chips. Commercial remaining performance obligations reached US$678b, which the article links to a business increasingly tied to long-term AI and cloud usage commitments. The main risk cited is whether AI and cloud demand can keep pace with planned 2026 capex of US$175b to US$190b, which could pressure free cash flow and gross margins. Regulatory scrutiny of AI tax incentives and off-balance-sheet commitments, along with insider selling, are also flagged as background concerns. The Trellis integration into Microsoft 365 Copilot for Legal is presented as an example of Copilot becoming a workflow hub, though its payoff depends on more vertical partners adopting it.
Related markets
Latest news
- Wall Street May Be Underestimating This Magnificent Seven Stock
Alphabet trades 21.2% below its 52-week high, while Google Cloud grew 82% last quarter. Q2 revenue reached 119.80 billion USD, beating the 116.91 billion USD estimate, and cloud backlog hit 514 billion USD. Offsetting that, 2026 capex guidance was raised to 195–205 billion USD, Q2 free cash flow was -5.86 billion USD, and long-term debt rose from 46.5 billion to 98.2 billion USD. 24/7 Wall St. sets a price target of 421.17 USD, 32.4% above the 318.15 USD share price, and rates the stock a buy with 70% confidence.
- Is UPS a Buy After Its Latest Earnings Report?
UPS shares rose nearly 5.8% on Oct. 27, the day of its third-quarter report, after adjusted EPS of $1.69 beat consensus by $0.06 and revenue of $22.9 billion topped expectations by over $600 million. The company raised its full-year outlook to $92.6 billion in revenue and roughly $8.75 billion in adjusted operating profit. Its “Efficiency Reimagined” turnaround cut 48,000 jobs in 2025 and 30,000 more earlier this year, while shifting toward higher-margin customers such as healthcare, small and mid-sized businesses, and data centers. Truist raised its price target by $5 to $120 and kept a buy rating. The author cites a 6.25% trailing dividend yield supported by expected adjusted free cash flow of $6.1 billion, and argues investors can buy the stock now.
- Neocloud stocks could face a house-of-cards collapse
In the Loop host Ejaaz Ahamadeen argues that neocloud firms, including CoreWeave, Nebius and Iron, face a possible house-of-cards collapse. Their shares have fallen around 30–35% over the past couple of weeks, and they depend on cheap borrowed capital to buy GPUs and build data centers, while insurers reportedly back debt they also lend against. The host cites Amazon saying some GPUs sit idle because it cannot secure enough power or grid access, with losses of 1–5 million USD a day, and notes that delayed data center deliveries may owe 1–5 million USD per day. He says the views of Ken Griffin, Elon Musk and Chamath have some justification, and describes a circular financing loop forming.
- Aptos Advisor Leaves Post, Moves Meme-Fueled Campaign to Meta Stock
Buzz, the memer who promoted the Aptos token, says he left his advisor role after his one-year contract ended and has sold his APT. APT has fallen 10.7% since the start of the month to a 607 million USD market cap. He is now targeting Meta, arguing retail investors have been forgotten and the company has strong fundamentals. Meta's market cap of about 1.59 trillion USD is 2,619 times that of Aptos, and its shares fell 1.2% on the day his campaign began, which makes moving the price a real challenge. The article compares this with Roaring Kitty's GameStop rally, when GME had an 11.85 billion USD market cap, and says Buzz's challenge is 134 times larger.
- Aptos Advisor Leaves Post, Moves Meme-Fueled Campaign to Meta Stock
Former Aptos advisor BuzzlamicJihad has left the project after his one-year contract ended, describing the split as mutual, and says he has sold his APT tokens. The meme campaign is now aimed at Meta, with the argument that retail investors have been forgotten and the company has strong fundamentals. Since the start of the month APT has fallen 10.7% to a $607 million market capitalization, while Meta's is $1.59 trillion, about 2,619 times larger. The article compares the task with Roaring Kitty's GameStop campaign, where GME had an $11.85 billion market cap, saying Meta's valuation is about 134 times larger.
- Wall Street's Fast Money Fled Bitcoin ETFs, Sovereign Funds Stepped In
Galaxy Research says a handful of hedge funds and banks drove almost all institutional selling of U.S. spot Bitcoin ETFs, while wealth platforms and sovereign funds bought. Holdings reported by institutions in 13F filings fell 14%, from 355,000 BTC at the end of September 2025 to 307,000 BTC by June 2026. Nine firms, including Millennium Management, Goldman Sachs and Tudor Investment, cut 68,000 BTC, roughly $5.4 billion at current prices, while Morgan Stanley's wealth management arm, Mubadala and the Abu Dhabi Investment Council were among the buyers. Galaxy says the sellers were mainly running cash-and-carry trades rather than betting on Bitcoin, as the front-month futures basis averaged 4.8% annualized in the 30 days to Oct. 21, just 0.6 points above Treasury bills, down from 7.9% before the all-time high. Since the June low, the funds have added 87,000 BTC, which Galaxy calls directional buying.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.