Microsoft (MSFT) stock is in negative territory early Wednesday after the tech giant disclosed its fiscal fourth-quarter earnings report. The results beat top- and bottom-line estimates, but the company's outlook fell short of expectations.
In the three months ended June 30, Microsoft's revenue increased 15% year-over-year to $64.7 billion, due in part to 29% growth in Azure and other cloud services. Its earnings per share (EPS) rose 9.7% from the year-ago period to $2.95.
"In our largest quarter of the year, we again delivered double-digit top and bottom-line growth with continued share gains across many of our businesses and record commitments to our Microsoft Cloud platform," Microsoft Chief Financial Officer Amy Hood said in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Wall Street was anticipating revenue of $64.4 billion for Microsoft's fiscal Q4 and earnings of $2.93 per share, according to CNBC.
However, sentiment turned negative toward Microsoft for two reasons. One is that its year-over-year revenue growth fell short of the 31% increase Wall Street was expecting. Additionally, the company's revenue outlook of $63.8 billion to $64.8 billion for its fiscal 2025 first quarter is below the $65.2 billion estimate from analysts. MSFT added that it anticipates full-year revenue growth in the double-digits.
Is Microsoft stock a buy, sell or hold?
Wall Street is bullish on the Dow Jones stock, and for good reason. Indeed, shares are up more than 23% in the past 12 months. What's more, MSFT has been one of the best buy-and-hold bets for long-term investors.
According to S&P Global Market Intelligence, the average analyst target price for MSFT stock is $498.07, representing an upside of roughly 20% to current levels. Plus, the consensus recommendation is Strong Buy.
Financial services firm Oppenheimer is one of the more bullish outfits on the blue chip stock with a Buy rating and $500 price target.
Microsoft is "one of the world's leading platform tech companies, with large franchises in Cloud (Azure), business productivity (Office), personal computing (1.4 billion Windows users), gaming (Xbox), and communications (Teams)," says Oppenheimer analyst Timothy Horan. "Now, artificial intelligence (AI) is improving all the above."
Horan adds that the cloud industry remains only 30% penetrated, even as it grows 20% each year. And MSFT "is especially well positioned for enterprise AI adoption" in the cloud space "due to its large entrenched customer base and infrastructure."
Related Content
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
- Earnings Calendar and Analysis for This Week
- The Best Large-Cap Stocks to Buy
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
My Three-Day Rule for Investing: And If it Applies NowStock Market I've seen a lot in my career. Here's what I see now in the stock market.
