Microsoft Q2 Earnings Exceed Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: stocktwits
- Significant Revenue Growth: Microsoft reported Q2 revenue of $81.3 billion, a 17% increase year-over-year, surpassing street expectations of $80.25 billion, indicating strong performance in the software market.
- Improved Profitability: The earnings per share came in at $4.14, a 24% year-over-year increase, exceeding analyst estimates of $3.95, reflecting effective strategies in cost control and revenue growth.
- Increased Capital Expenditure: Microsoft's capital expenditure rose 66% year-over-year to $37.5 billion, with about two-thirds allocated to short-lived assets like GPUs and CPUs to meet growing customer demand, highlighting ongoing investments in AI and cloud computing.
- Optimistic Future Outlook: Microsoft expects next quarter's revenue to range between $80.65 billion and $81.75 billion, with growth rates of 15% to 17%, while Azure's revenue growth is projected to be between 37% and 38%, demonstrating confidence in future growth.
Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 480.580
Low
500.00
Averages
631.36
High
678.00
Current: 480.580
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
