Microsoft to Reveal Earnings After Market Close

Microsoft is set to announce its financial outcomes for the fiscal third quarter following the market's closure on Wednesday.

Analysts have outlined their expectations, as compiled from LSEG's consensus:

Projected revenue suggests a 10.6% increase year-over-year, marking the slowest growth rate in over two years. While the most recent quarter is significant, shareholders are particularly keen to hear from Microsoft's CEO regarding business forecasts for the remainder of the year. This curiosity comes in light of recent announcements about widespread tariffs imposed on major trading partners.

Despite the fact that Microsoft's primary revenue stream is its software sales, the company also heavily invests in buying equipment to render services to its customers. Just two days post-President Trump's imposition of tariffs on imports, ex-CEO Steve Ballmer expressed concerns, labeling these tariffs as unfavorable. Meanwhile, CEO Satya Nadella assured that Microsoft would adapt to geopolitical and economic transformations.

Earlier this year, Microsoft earmarked $80 billion for capital in AI data centers for the current fiscal year. CFO Amy Hood signaled a likely deceleration in capital expenditure growth for the fiscal year 2026. In the fiscal second quarter, revenue from Azure's non-AI cloud services fell short of their internal forecasts.

To address these issues, Nadella mentioned on a call with analysts that Microsoft is refining its sales incentives. Recently, analysts from Bank of America and BMO have revised their Azure growth estimates downward.

As of the recent market close on Tuesday, Microsoft’s stock had decreased by roughly 7% this year, while the S&P 500 has seen a 5% decline.

Within the quarter concluding on March 31, Microsoft adjusted its strategic partnership with its key AI collaborator, OpenAI. It was noted that Microsoft would have the right of first refusal on new computing resources OpenAI might require, although it isn't always obligated to fulfill such requests. On the very same day, OpenAI launched a joint AI infrastructure initiative in collaboration with industry partners at the White House.

Company leaders are expected to share further insights and engage in discussions about the results during a call with analysts scheduled to start at 5:30 p.m. Eastern Time.