Microsoft to report Q4 earnings as Wall Street looks for continued AI growth

Microsoft (MSFT) will report its fiscal fourth quarter earnings after the bell on Wednesday. Wall Street is looking for the software giant to offer up solid growth in its AI and cloud business as its customers explore further AI use cases.

The Windows maker’s earnings come a week after Google (GOOG, GOOGL) posted better-than-anticipated second quarter results on the strength of its cloud revenue growth, sending shares higher. The company also said it is pouring an additional $10 billion into its AI buildout, bringing the year’s total from $75 billion to $85 billion.

But investors were unperturbed by the increase and instead focused on CEO Sundar Pichai’s commentary indicating that Search volume grew double digits in the quarter.

Those results could bode well for Microsoft as investors look toward further AI sales gains.

For the quarter, Wall Street is anticipating Microsoft to report adjusted earnings per share (EPS) of $3.37 on revenue of $73.89 billion, according to Bloomberg analyst consensus estimates. The company saw adj. EPS of $2.95 and revenue of $64.72 billion in the same period last year.

Intelligent Cloud segment revenue, which includes Microsoft’s Azure business, is expected to top out at $29.09 billion, up 22% from the $23.78 billion the company saw last year. Microsoft attributed 16 percentage points of growth in its Azure business to AI sales in Q3. For Q4, analysts are anticipating 17.25 percentage points of growth, up from 11 percentage points in Q4 2024.

Part of the reason for that, Microsoft said, was growth in non-AI services, as well as more server capacity coming on line faster than anticipated. Still, the company expects demand to continue to outpace supply on the AI side for Q4.

Despite Microsoft’s solid growth, Wedbush analyst Dan Ives wrote in a recent investor note that the company’s AI investments will truly take off in fiscal 2026.

“While AI use cases are building markedly in FY25, [it’s] clear FY26 for Microsoft remains the true inflection year of AI growth as CIO lines build for deployments behind the velvet ropes in Redmond,” Ives wrote.

BofA Global Research’s Brad Sills, meanwhile, said that Microsoft’s AI-powered Copilot software could serve as its next growth catalyst.

“While an inflection quarter is unlikely, we believe Copilot has potential to drive incremental growth as we move through FY26,” Sills wrote in an investor note.

Shares of Microsoft were up more than 21% year to date as of noon Monday. Google’s stock price was up just 13%, while Amazon’s stock was up more than 27%.