To The Moon

$Microsoft(MSFT)$ is scheduled to announce its fiscal Q3 2025 (quarter ending 31 March 2025) financial results after the market closes on Wednesday, 30 April 2025.

Revenue: Expected to be around $68.4 billion, representing approximately 10.5% year-over-year growth.

Earnings Per Share (EPS): Expected to be around $3.20 - $3.23, indicating roughly 9-10% growth compared to $2.94 in the same quarter last year (Q3 FY24).

Microsoft (MSFT) Last Neutral Earnings Call Saw Share Price Decline By 11.23%

MSFT had a neutral earnings call which saw its share price decline by 11.23% since.

The earnings call highlights Microsoft's strong performance in cloud and AI services, with record commercial bookings and significant growth in AI and cloud revenue. However, there were challenges in Azure non-AI services and declines in gaming and on-premises server revenues. The sentiment is balanced with notable achievements in cloud and AI offset by specific underperformances.

Microsoft (MSFT) Guidance

During the Microsoft Fiscal Year 2025 Second Quarter Earnings Conference Call, the company provided guidance that highlighted significant growth across various metrics. Microsoft Cloud revenue exceeded $40 billion for the first time, marking a 21% year-over-year increase. The AI business demonstrated remarkable performance, surpassing an annual revenue run rate of $13 billion with a 175% year-over-year growth. The company also reported strong commercial bookings, which increased by 67%, with commercial remaining performance obligations reaching $298 billion, reflecting a 34% rise. Microsoft 365 Commercial Cloud revenue grew by 16%, LinkedIn revenue increased by 9%, and Dynamics 365 revenue rose by 19%.

The call also noted a 70% gross margin percentage for Microsoft Cloud and the successful expansion of data center capacity over the past three years, further supporting Microsoft's strategic focus on AI and cloud infrastructure.

Key Areas of Focus for the MicroSoft (MSFT) Upcoming Report:

Intelligent Cloud Performance: Investors will closely monitor the growth rate of Azure, Microsoft's key cloud computing platform. Analysts anticipate continued strong growth, potentially in the low-to-mid 30s percentage range (constant currency). Performance relative to competitors like Amazon Web Services (AWS) and Google Cloud will be scrutinized.

Microsoft Cloud revenue reached over $40 billion, growing 21% year-over-year, marking continued strength and growth in cloud services.

AI Monetization: Following significant investments in AI, including tools like Microsoft 365 Copilot and Azure OpenAI Service, the market will look for signs that these investments are translating into meaningful revenue growth. In Q2, Microsoft stated its AI business had surpassed a $13 billion annual revenue run rate.

Microsoft's AI business surpassed an annual revenue run rate of $13 billion, growing 175% year-over-year, driven by enterprise-wide deployments of AI solutions.

Productivity and Business Processes: This segment includes Office 365. Continued growth in Office 365 Commercial revenue is expected (around 14-15% constant currency).

Commercial bookings increased 67%, or 75% in constant currency, significantly ahead of expectations, driven by large Azure commitments from OpenAI.

Microsoft 365 Copilot saw accelerated customer adoption with a significant increase in seats and usage intensity, expanding seats by more than 10x over 18 months.

LinkedIn Premium achieved over $2 billion in annual revenue, with subscriber growth increasing nearly 50% over the past two years.

More Personal Computing: This segment includes Windows and Xbox. Expectations are more moderate, with potential declines in Windows OEM revenue but some growth in Xbox content and services.

Azure non-AI services growth was slightly lower than expected due to go-to-market execution challenges, particularly with scale motions reaching customers through partners.

Gaming revenue decreased by 7%, affected by hardware declines, although Xbox content and services revenue increased by 2%.

On-premises server revenue decreased by 3%, slightly below expectations, driven by slower than expected purchasing around Windows Server 2025 launch.

Enterprise and Partner Services revenue decreased by 1%, below expectations, with lower performance across Enterprise Support Services and Industry Solutions.

Forward Guidance: Microsoft's financial outlook and guidance for the next quarter (Q4 2025) will be crucial. The guidance provided in the previous quarter (Q2) was slightly below consensus estimates, which impacted the stock price despite beating Q2 expectations.

Microsoft (MSFT) Price Target

Based on 49 analysts from Tiger app offering 12 month price targets for Microsoft in the last 3 months. The average price target is $487.26 with a high forecast of $600.00 and a low forecast of $420.00. The average price target represents a 24.35% change from the last price of $391.85.

This reflect that investors might still be confident on MicroSoft because of the following which we might need to watch closely.

• AI Investments: Progress in AI products like GitHub Copilot, Azure AI, and Microsoft 365 Copilot.

• Cloud Growth: Competition with AWS and Google Cloud, and Azure’s market share.

• Regulatory/Economic Risks: Antitrust scrutiny, macroeconomic conditions, and enterprise spending trends.

Technical Analysis - Exponential Moving Average (EMA)

Microsoft was up 1.17% at the close of last Friday, which during the day Microsoft continue its uptrend from Thursday,, we did saw that they did lose the attempt at a daily uptrend with the flush. But now we are see the bulls getting back the daily uptrend with a nice bounce.

So any further move lower the bulls are going to be looking to two-step this process if they just do not V-shape it right away, the two-step process looking for higher low anything above 355 looking for a daily higher low for possible leg number two into a new daily uptrend.

Then if a pullback happen, then it would open up an opportunity for a swing trade and also a possible short puts write if it falls below the 350-360 mark. Microsoft is going for a trend change which would be a break of the 90-day tariff pause area.

The RSI is suggesting that momentum is picking up and now it is above the 50-day period and I am expecting Microsoft to continue trading on a nice daily uptrend next week.

Summary

Microsoft report on 30 April will be important for understanding the ongoing growth trajectory of Microsoft's cloud and AI initiatives. I would be focusing on how Microsoft is planning to navigate through the tariff turmoil and also how the AI monetization have been working for Microsoft.

Appreciate if you could share your thoughts in the comment section whether you think Microsoft would be providing a much stronger AI monetization despite competition heating up.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.