Microsoft heads into earnings with a lot to prove

Microsoft Corporation MSFT is heading into its Q3 earnings with a lot riding on the print, as investors look for another solid quarter to steady the narrative after a softer run in the stock.

The company reports on April 29, with Wall Street expecting EPS of $4.06 and revenue of $81.43 billion, up 16.2% Y/Y. Shares are down about 12% YTD, but sentiment hasn't really broken, with most analysts still leaning bullish. Last quarter already showed why, with revenue up 17%, driven largely by its Intelligent Cloud business and continued Azure strength.

That said, there are a few things investors are watching closely this time. Morgan Stanley pointed to ongoing supply constraints and GPU allocation issues that could limit Azure's upside, while also flagging growing competition around Copilot in the AI space. At the same time, CEO Satya Nadella has been leaning into the bigger picture, arguing the company is still early in the AI cycle and already building something meaningful.