:max_bytes(150000):strip_icc()/GettyImages-2242649855-7dca1ec250734990b7502aeecaeef04b.jpg "Here’s How Much Traders Expect Microsoft Stock To Move After Earnings This Week")
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Key Takeaways
- Microsoft stock is expected to move about 4% by the end of the week, according to recent options pricing data, as the company gets set to release its quarterly results on Wednesday after the closing bell.
- Shares jumped to a record high following strong results in July but have been trending sideways ever since.
- Wall Street analysts are overwhelmingly bullish on Microsoft stock, which they expect to get a boost from another quarter of robust cloud computing growth.
Microsoft (MSFT) is scheduled to report quarterly results after markets close on Wednesday, and some investors expect the stock to jump to a fresh record.
Options prices suggest traders expect Microsoft shares to move about 4.4% in either direction by the end of the week. A move of that size off of Friday’s close would put shares at about $546, an all-time closing high, or about $500, their lowest price since early September.
Why This Is Important
Microsoft, with a market capitalization of nearly $4 trillion, has more sway over the broader market than nearly every other stock. Strong results and a commensurate stock move could boost to major indexes and brighten the mood on Wall Street.
Microsoft stock has moved an average of nearly 6% following its four most recent earnings reports. In July, shares rose about 4% the day after the company reported better-than-expected earnings driven by cloud computing growth. Shares jumped more than 7% on similarly strong results in April.
Microsoft stock has risen about 26% since the start of the year, but shares have been treading water since jumping to a record high after its July earnings report. Economic uncertainty weighed on shares throughout the first few months of the year before a string of trade deals and optimism about artificial intelligence helped lift shares into the summer.
Analysts expect Microsoft to report another quarter of strong revenue and earnings growth. Microsoft’s Azure cloud computing platform, where the company recognizes revenue from hosting AI workloads, is expected to grow 38% year-over-year.
Artificial intelligence investments will also be in the spotlight. Executives estimated capital expenditures would total $30 billion in the quarter being reported Wednesday. Bank of America analysts wrote in a note last week that an increase to Microsoft’s capex guidance could give the stock a post-earnings boost.
Analysts are overwhelmingly bullish on Microsoft’s stock, with all 16 of the analysts tracked by Visible Alpha with current price targets rating the stock a “Buy.” Their average price target of about $640 represents about 20% upside from the stock’s intraday price on Monday.
