Microsoft is scheduled to announce its fiscal Q1 earnings for 2026 after the market closes on Wednesday, 29 October 2025.
Here are consensus expectations from Tiger Trade for Microsoft's Q1 earnings:
Revenue: $75.32 billion, up 14.84% YoY
EPS: $3.666, up 11.08% YoY
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Previous Quarter Review
Overall revenue rose 18% to $76.4 billion in the fiscal fourth quarter vs. expected $73.81 billion
In the just-ended fiscal fourth quarter, capital spending rose 27% to $24.2 billion, compared with estimates of $23.08 billion
The fiscal first-quarter capital expenditure estimate of $30 billion surpassed analysts' expectations of $23.75 billion
Azure revenue rose 39% in the June quarter, beating estimates of 34.75%
Microsoft plans record $30 billion in capital spending for Q1
Workload Migration to Azure and Robust Demand for Security and Application Products Are Key Growth Drivers
Bank of America analysts anticipate Microsoft Q1 revenue will reach $75.32 billion, supported by continued workload migration to Azure and solid performance in security and applications.
Bank of America analysts now see potential for Azure growth of 39% (+38% constant currency) compared to their base case of 38% (+37% constant currency). While strength in security was partially offset by softness in other workloads, this was mainly due to capacity constraints as customers deploy more compute-intensive workloads such as AI services, as well as enterprises taking additional time to map out multi-year strategies that further embed Microsoft’s solutions. Bank of America analysts view both factors as positive for the longer term.
“These dynamics are positive longer term as customers embed Microsoft more deeply within the enterprise,” the analysts wrote, adding they see upside in Microsoft’s productivity and business processes segment, supported by steady demand for Office E3 and E5 subscriptions.
Pay Attention to Capital Expenditure Trends
Bank of America highlighted capital expenditure trends as a potential catalyst for the stock, noting Microsoft’s “strategic and measured approach” to AI infrastructure expansion and growing visibility into compute investments. The bank expects capital spending to rise above consensus estimates of $115 billion for fiscal 2026 to about $125 billion, or 38% of revenue. Upward revisions to capital spending and margins, as well as accelerating growth in commercial Office products, could lift sentiment.
Wall Street Stays Bullish on MSFT
According to MarketBeat data, 32 out of 34 analysts currently have a “Buy” or equivalent positive rating on MSFT. The average 12-month price target is about $618 per share. Price forecasts range from around $475 on the conservative end to as high as $700 from the most bullish calls.
The bullish thesis centers on Microsoft’s positioning in key high-growth areas. “Microsoft is becoming more of a cloud infrastructure business and a leader in enterprise AI,” says Gerrit Smit, a strategist at Stonehage Fleming. Many analysts highlight Azure’s accelerating growth and Microsoft’s integration of AI across its product suite as major competitive advantages. Morgan Stanley recently named MSFT one of its “Top Picks,” raising its price target to $625 and praising the company’s cloud and AI “growth trajectory”.