Important points
- Microsoft is scheduled to report its fiscal 2024 third-quarter earnings after the bell on Thursday.
- Analysts expect sales and adjusted earnings to increase from the same period last year.
- Investors will likely be focused on the growth in Microsoft’s cloud division, which drove the second-quarter earnings boost.
- Microsoft may also provide updates on its artificial intelligence (AI) projects, with analysts saying the company could be well-positioned for AI-driven growth.
Microsoft (MSFT) is scheduled to report its third-quarter fiscal 2024 earnings after the bell on Thursday, with investors betting on growth in the company’s cloud division and artificial intelligence (AI) updates from Microsoft’s OpenAI partner. It will be worth paying attention to.
Analysts expect Microsoft to report $60.87 billion in revenue for the quarter, down slightly from last quarter but up from a year ago, according to estimates compiled by Visible Alpha.
Adjusted net income is expected to be $21.13 billion, down from $21.87 billion in the previous quarter but up from $18.3 billion in the year-ago period. Adjusted earnings per share (EPS) are expected to be $2.84. This compares to $2.93 in the previous quarter and $2.45 in the year-ago period.
| Analyst forecasts for Q3 2024 | Q2 2024 | Q3 2023 | |
| revenue | $60.87 billion | $62.02 billion | $52.86 billion |
| Adjusted diluted earnings per share | $2.84 | $2.93 | $2.45 |
| Adjusted net income | 21.13 billion dollars | $21.87 billion | $18.3 billion |
Key Metric: Cloud Revenue Driven by Azure
Investors will be focused on the growth of Microsoft’s intelligent cloud business after the division boosted the company’s second-quarter profits.
CFRA analysts estimate that revenue across the intelligent cloud sector could be boosted by 19% from Microsoft’s cloud platform, Azure, and the company expects AI to contribute at least 6 to 8 percentage points to this growth. and is expected to increase by 29%.
“While we expect the contribution of AI to further increase, MSFT is also outperforming the higher workload optimization levels exhibited by enterprise customers in the previous year,” the analysts said, adding that the company believes the recent pace of growth is sustainable. He pointed out that he expected it to be.
Analysts at Bank of America predict that continued adoption of the Azure cloud infrastructure platform and its cloud-based Office 365 productivity suite will put Microsoft on track for “sustained low-double-digit growth over the next three to five years.” We believe we are well-positioned to generate growth.” Others.
Business focus: AI updates
Microsoft may also provide an update on its AI efforts, as its partnership with ChatGPT maker OpenAI positions it as an early leader in the AI boom.
Further contributions and momentum from AI are expected, CFRA analysts wrote, suggesting AI “will support double-digit growth and multiple expansion potential through 2025.” There is.
CFRA analysts note that Microsoft may be well-positioned for AI-driven growth, noting that the company’s partnership with OpenAI in particular allows it to “advance AI-related growth faster than other cloud/software providers.” You can monetize your profits.”
Bank of America analysts said: “The next catalyst for the stock will be evidence that major AI product cycles, such as the M365 co-pilot, are in full swing in the coming quarters.”
Microsoft stock has risen nearly 7% since the beginning of the year, with the stock trading at $400.66 as of 2:25 p.m. ET on Friday.
