What analysts mean about Microsoft shares prior to earnings

Microsoft (MSFT) is set to report financial earnings for the second quarter after the market closure on Wednesday, where analysts are largely positive ahead of the results.

“The Investor Sentiment has changed negatively as a ‘wall of concern’ about gross margins, CAPEX, Genai revenue generation and construction of the Openai relationship,” said Morgan Stanley analysts recently, noting that Microsoft has been doing worse than other major cap- software companies over the past three months.

The company lowered its price target to $ 540 from $ 548, but said Microsoft’s position in generative artificial intelligence and the latest market trends create “an attractive entry point.”

Overall, 18 out of 19 analysts have traced Visible Alpha a “purchase” or similar rating compared to 1 “team” rating. The consensus cure target is just over $ 517, a premium of 16% compared to the share’s Friday closure around $ 444.

Wall Street expects Microsoft to report a turnover of $ 68.92 billion, an increase of 11 % year-to-year; and a $ 23.36 billion earnings, or $ 3.13 per share, up from $ 21.87 billion, or $ 2.93 per share a year earlier. Revenue from Microsoft’s Intelligent Cloud segment, which includes its Azure Cloud Computing platform, is expected to increase by 20 % to $ 25.76 billion.

Jefferies analysts are “secure of Azures Genacceleration” in the second half of the financial year, the company recently said. The analysts pointed to a recent Microsoft blog post announcing a “new, large Azure obligation” from chatgpt producer Openai. Jefferies has a “purchase” assessment and a price target of $ 550.

The shares in Microsoft have risen about 11% over the past 12 months.