Microsoft () reports fiscal Q4 2026 results later this evening for its fiscal year-end, and will issue FY2027 guidance, the key number the AI trade is watching.
Analysts expect EPS of about $4.21–$4.24 and revenue near $87.7B, up roughly 15% year-over-year for both extending a four-quarter streak of beats.
Key Highlights
- Microsoft (MSFT) posted strong Q3 FY2026 results: revenue rose 18% YoY to $82.9B and EPS grew 23%, driven by Microsoft Cloud up 29% to $54.5B. Azure and AI infrastructure investments are fueling demand, making cloud and AI core growth engines, though macro uncertainty and higher capex create supply-demand pressure.
- MSFT trades 29% below its 52-week high of $555.45, at about 20.6x forward earnings — one of its cheapest multiples in years despite continued double-digit revenue growth.
- Today’s report closes fiscal 2026 and must include guidance for FY2027. Consensus revenue $87.7B (+14.7% YoY) and EPS $4.22 (+15.6%). The key is Amy Hood’s capex outlook. If she guides around $220B (20–30% growth), it’ll look disciplined vs. Azure’s pace; a higher figure would fuel concerns the spending has no ceiling.
- A key focus this week is capex guidance, as fiscal year-end, brings Microsoft’s first FY2027 capital-spending outlook (fiscal year began July 1).
Key items to watch in Microsoft’s fiscal Q4 results
- Azure guidance: Azure has surged but faces capacity limits. Management is guiding 39–40% constant-currency growth this quarter, the single most important metric and we’ll watch commentary on how much capacity is reserved for internal use and any details on Azure’s recovery point objective.
- AI: Microsoft’s AI-driven capex has outpaced revenue, raising questions about payback on these investments. Look for updates on Claude Copilot seat growth (software licensing) and whether it’s accelerating enterprise AI adoption.
- Margins: Margins should hold, but rising capex means depreciation could increase materially — a key risk to monitor.
- Copilot and AI revenue: Microsoft said in April its AI business reached a $37B annual run rate (up 123% YoY), versus $13B in Jan 2025. Whether management updates that figure again on Wednesday will be a key signal.
Analysts Expectation
- Scotiabank cut its MSFT price target to $470 (from $550) but kept a Sector Outperform rating.
- Citizens reiterated a Market Outperform rating and $550 price target for Microsoft (MSFT).
- Piper Sandler analysts reiterated an Overweight rating and $540.00 price target on Microsoft (MSFT).
MSFT Q4 2026 earnings after market (4:05 pm ET) Wednesday July 29, 2026
Expected Move by Option Expiration
Options traders price a roughly $190B swing after Wednesday’s earnings, highlighting investors’ eagerness to see if massive AI spending is paying off.
Options market imply about a 6.9% move after Q4 results, roughly up to $420 or down to $366.05 by Friday versus a 12-cycle average implied move of 4.8% and actual move of 4.4%, ORATS data show.
The put/call ratio is tilted toward calls across the next four expirations.
Technical Analysis Perspective
- MSFT formed a double-top near the $555 highs (July & Oct 2025).
- Stock found support at $355–$345 in Apr 2025, Mar 2026 and late June, prompting strong rebounds.
- The current rebound becomes a triple-bottom bullish setup if price clears and holds above $405–$408 after earnings.
- A confirmed break above $405–$408 would target $442–$455.
- Base case: break and hold above $405–$408 → rally to $442–$455.
- Alternate case: rejection at $405–$408 → pullback to the $355–$345 base.
Weekly Candlestick Chart
MSFT Seasonality Chart:
Since 2007, MSFT closed July, higher 65% of the time (avg +2.59%) and August higher 58% of the time (avg +1.41%).
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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, & Fund Management. He is the founder of www.twtlearning.com providing financial education, research and advisory services to fund & hedge fund managers and family offices.
He has been trading FX, FX options, US stocks & options, Indices, Commodities & Oil, and Metals Futures. He has a CMT charter, an AAPTA membership, and a CMT Canada membership. He has worked in various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.
He is regarded as an excellent mentor and has trained more than 2000+ users in North America, Gulf countries & Asia on financial markets & products, active and passive trading, and technical analysis strategies. He emanated technical analysis daily and weekly reports for BridgeNews Chicago bureau and updated technical analysis reports on Bloomberg and Reuters while working with ABN Amro bank treasury & capital markets. Has moderated and produced technical analysis reports for Thomson Reuters (Refinitiv) users’ chat rooms and trained users on technical analysis techniques and models. Conducted TA & Global Markets outlook workshop with central banks, sovereign funds, global & regional banks & family offices.
