Microsoft (MSFT) will likely deliver strong fiscal Q4 results on July 30 after reporting better-than-expected fiscal Q3 Azure results in April, Deutsche Bank said in a note Friday.
The catalysts for the company's revenue outperformance will be a "not overly demanding Azure setup, more resilient PC shipments, rebounding sentiment and activity post April tariff uncertainty," the note said.
Also, the company may also see year-on-year expansion for its operating margin and EPS upside backed by factors including "well above seasonal OpEx growth despite constrained headcount growth and AI savings," Deutsche said.
For 2026, Microsoft's management will likely "directionally guide to another year of double-digit [year on year] revenue and operating income growth, as it has in recent years," the note said.
According to Deutsche, the 2026 consensus estimates for 13% year on year revenue growth are underestimating the "resiliency of Azure demand, the signal being sent around mix shifting back toward shorter-lived assets within still growing overall CapEx, and rebounding non-AI Azure activity that started to show last quarter and seem to be strengthening in our recent checks."
Deutsche has a buy rating on Microsoft and $550 price target.
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