Microsoft is expected to report its fiscal fourth-quarter results after the market closes on Wednesday, with analysts forecasting adjusted earnings per share of $4.24 and revenue of $87.62 billion, reflecting a year-over-year growth of 14.6%. This growth is projected to accelerate to 15.4% in the following quarter.
However, Microsoft shares have declined approximately 19% in 2026, contrasting with an 8.5% gain in the S&P 500, as investors are wary of potential disruptions from generative AI technologies.
Deutsche Bank analysts noted that Microsoft faces 'some concentration risk' due to its significant relationship with OpenAI, which accounts for about 45% of its $625 billion in commercial remaining performance obligations.
CEO Satya Nadella is navigating the allocation of computing resources between Azure cloud services and AI applications, raising concerns about the availability of AI chips for cloud clients. Analysts expect Azure growth to be around 40% at constant currency.
Investors will also be keen to see if Microsoft adjusts its capital expenditure forecasts for data center expansion, especially following Alphabet's recent increase in its spending plans. During the quarter, Microsoft launched a cost-effective AI coding model, appointed Dan Shapero as the new head of LinkedIn, and reduced Xbox Game Pass subscription prices.
The company's executives will discuss the earnings results and future guidance in a conference call scheduled for 5:30 p.m. ET