TLDR
- MSFT stock rose 1% in early premarket trading ahead of 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 be closely monitoring the $190 billion in capital spending planned for the 2026 calendar year.
- Azure growth remains a key 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 trading before the market opened on Wednesday as investors braced for the company’s fiscal fourth-quarter results after the closing bell. The report will test whether cloud demand can offset concerns about rising spending and increased competition.
Analysts expect Microsoft to report revenue of $87.63 billion, up 15% from the previous year. Adjusted earnings are expected to be $4.22 per share, also up 15%. This revenue growth will be the slowest in five quarters.
MSFT stock gains ahead of earnings report
MSFT stock has had a tough year despite rebounding in July. Shares fell 23% during the first half of 2026, marking their weakest half-year performance since 2000. The stock is still down 18.3% this year.
Microsoft faces competition from Google and Anthropic OpenAIand other cloud service providers. Expensive spending on data centers and artificial intelligence systems has added to the concerns.
Capital spending plans are drawing attention
Microsoft has projected $190 billion in capital spending for calendar year 2026. Investors will be watching fourth-quarter spending and any changes to the company’s full-year outlook.
Alphabet recently raised its spending forecast after reporting faster cloud growth. The move increased the chance that Microsoft and Amazon would pursue higher spending plans, Evercore ISI analyst Mark Mahaney said.
Microsoft, Amazon, and Meta stocks Its shares fell last week after Alphabet raised its capital spending forecasts, even as Google reported stronger cloud sales.
Azure growth faces a higher bar
Azure’s growth will remain a focus in the earnings report. Microsoft said Azure and other cloud services grew 40% in the fiscal third quarter.
Google Cloud Sales rose 82% last quarter, setting a benchmark for cloud companies. Investors will compare Microsoft’s growth rate to this result and will watch for updates on demand for AI.
Microsoft 365 Copilot adoption will be of interest. The company’s workplace AI product showed slower growth in subscriptions than some investors expected.
Job cuts add to the focus on cost
Microsoft has reduced headcount across business units. The company cut about 3,200 jobs at Xbox this month and announced plans to sell or spin off five game studios.
In June, Microsoft It cut 6,000 jobs, about 4% of its workforce. Most of the cuts affected production and engineering teams.
Koyfin data shows that 50 out of 53 analysts rate MSFT shares a buy or higher. The average price target is $555.77, about 41% higher than Tuesday’s closing price.
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