Microsoft stock has barely moved since July. Earnings is about to change that.

Copyright © HT Digital Streams Limited All rights reserved. Microsoft stock has been flat since its July 30 earnings call, while Apple is up more than 25%. Summary A surge in cloud computing earnings—and high-profile investments in AI—should help the company catch up with other technology leaders. Microsoft has been all but ignored since its last earnings report. But a “cloudy” outlook when it releases its results this coming week could be just what the stock needs to start heading higher again. Microsoft briefly surpassed the $4 trillion market cap milestone in intraday trading after it reported its latest earnings in late July, but the stock has since lost momentum. Shares, at $520.56, have been roughly flat since the company’s fiscal fourth-quarter earnings on July 30, even as the Nasdaq Composite rose nearly 9%. Adding insult to apathy, Apple is up more than 25% and is once again worth about as much as its Redmond, Wash.-based rival. Microsoft’s first-quarter 2026 results are due Oct. 29, and Wall Street is predicting a nearly 11% rise in earnings, respectable growth for a company of its massive size. And it should be powered primarily by power in Microsoft’s Azure cloud computing unit. Analysts expect revenue in that division to rise more than 30% from a year ago, according to FactSet. “The tone from enterprise customers and partners has improved again, with major Azure partners citing accelerating growth trends,” writes UBS analyst Karl Keirstead, whose $650 target for Microsoft is 25% above its current price. He expects Microsoft’s partnership with artificial intelligence leader OpenAI, the developer of ChatGPT, to further improve the outlook for Azure in the coming years. Some have raised concerns about how much money Microsoft is spending on the technology, as a lack of spending discipline could ultimately hamper profit margins. However, CFRA Research analyst Angelo Zino, who has a strong buy rating on Microsoft and a price target of $620, isn’t nervous about it. In a recent report, he argues that Microsoft’s capital spending growth should slow down a bit next year and that future spending plans should see a “bigger shift to servers/hardware, which should also support more profitable AI growth.” “[Azure] is poised to see strong growth through [2026] and likely beyond,” Zino writes. “The contribution of AI services will continue to make up a larger representation of overall sales” over the next few years, possibly reaching the high-teens. What about the recent softness in Microsoft’s stock since the last earnings report? It’s important to note that it might just be a blip—it’s nearly 25% higher than Apple and Amazon’s, 205.52. year Despite that, it still trades at a reasonable, if not necessarily cheap, valuation of around 28.5 times earnings forecasts for its next financial year, in line with its five-year average. Jake Seltz, manager of the Allspring LT Large Growth exchange-traded fund — where Microsoft is his second largest holding — told Barron’s that he thinks the stock’s recent underperformance is “unwarranted given its dominance with Azure and the cloud.” Microsoft could start moving again with another strong earnings report. Jordan Klein, an analyst at Mizuho Securities, called Microsoft an example of a quality tech stock with “real AI upside and growth” and a “super compelling” long-term buy. If all goes well, Microsoft could soon get back on the AI momentum train found. Get all the corporate news and updates on Live Mint. Download the Mint News app to get daily market updates and live business News. more topics #news Read next story