Technology giant Microsoft Corporation (NASDAQ:MSFT) could highlight the growth of its AI platforms when the company reports first-quarter financial results on Wednesday after market close.
Here are the earnings estimates, what experts are saying ahead of earnings and key items to watch.
Earnings Estimates: Analysts expect Microsoft to report first-quarter revenue of $75.33 billion, up from $65.58 billion in last year's first quarter, according to data from Benzinga Pro.
The company has beaten analyst revenue estimates for 10 straight quarters.
Analysts expect the company to report first-quarter earnings per share of $3.67, up from $3.30 in last year's first quarter.
The company has beaten analyst earnings-per-share estimates for more than 10 straight quarters.
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What Experts Are Saying: Microsoft is an "Obvious (and NOT So Obvious) AI Beneficiary," Guggenheim analyst John DiFucci says in a new investor note.
The analyst upgraded Microsoft shares from Neutral to Buy and introduced a price target of $586 ahead of earnings.
"In a time when investors struggle to separate AI beneficiaries from AI casualties, it's clear to us that Microsoft, along with the other hyperscalers, is a beneficiary," DiFucci said.
The analyst highlights multiple Microsoft segments and products, with a big focus on the Productivity Suite and Windows.
"We believe Microsoft has a near monopoly in the Productivity Suite market with its Office offering and therefore has been, and will be able to continue to directly monetize AI offerings."
A near-monopoly position in Productivity Suite could allow the company to better monetize AI and charge more, the analyst said.
"We always believed M365 would become a material opportunity to add incremental revenue and profit on top of Microsoft's stranglehold on the Productivity Suite market."
DiFucci said Windows is the company's second near Monopoly.
"We believe the company is set up well to outperform for the rest of this year," the analyst said of the Windows unit.
Azure is called an "obvious AI beneficiary" by the analyst. The analyst sees strong Azure revenue growth coming in the current fiscal year and beyond.
Based on valuation, Microsoft stock may not be cheap, DiFucci says in the investor note. The analyst argues that the stock may never be cheap, based on a multiple, for more than a year.
"That's because it's seen as a relatively low-risk stock, which we think is rooted in the superb management of two near monopolies couple with a visionary leader that has made a difference."
Freedom Capital Markets Chief Market Strategist Jay Woods called Microsoft stock "a standout" in 2025. The market expert said Microsoft stock peaked right after third-quarter financial results.
Woods said Microsoft stock reacted to strong Azure cloud division results last quarter with shares hitting all-time highs after the earnings.
"It was a clear sell the news event as shares have only managed a gain of 2.5% over the last three months," Woods said.
Woods said investors want to see the increased spending on AI turn into revenue and use cases in the company's product suite.
Key Items to Watch: Azure, AI, and Cloud will be key topics and items to watch in the quarterly results.
Revenue from Azure and other cloud services in the Intelligent Cloud segment was up 39% year-over-year in the fourth quarter. Overall cloud revenue was up 27% year-over-year in the fourth quarter.
Another segment that could get more attention than usual is the company's Xbox division. Xbox content and services revenue were up 13% year-over-year in the fourth quarter.
The company recently announced it will launch "Halo: Campaign Evolved" for PlayStation and PC in 2026, marking the first cross-play for the popular franchise in over 25 years. Video game retailer GameStop jokingly said this marks the end of the console wars.
Microsoft's stock could make several of the largest ETFs volatile on Wednesday and Thursday, with the tech giant being one of the Magnificent Seven members that is also in the Dow Jones Industrial Average.
Microsoft is the second-largest holding in the SPDR Dow Jones Industrial Average ETF (NYSE:DIA), with a 6.82% weighting.
In the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500, Microsoft is the third largest holding at 6.71% of assets.
In the Invesco QQQ Trust (NASDAQ:QQQ), Microsoft is the third largest holding at 8.24% of assets.
MSFT Price Action: Microsoft stock was up 1.5% to $531.52 on Monday versus a 52-week trading range of $344.79 to $555.45. Microsoft stock is up 27.0% year-to-date in 2025.
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