Microsoft is slated to report fourth-quarter fiscal 2025 results on July 30. The Zacks Consensus Estimate for revenues is pegged at $73.71 billion, indicating growth of 13.88% from the figure reported in the year-ago quarter. The consensus mark for earnings has remained steady at $3.35 per share over the past 30 days, suggesting 13.56% year-over-year growth.\n\nIn the last reported quarter, the company delivered an earnings surprise of 8.13%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.21%.\n\nMicrosoft's upcoming fourth-quarter fiscal 2025 results are expected to demonstrate strong momentum across its core business segments, driven by continued AI infrastructure investments and robust cloud adoption. The company positioned itself well for solid quarterly performance through strategic platform expansions and key product launches during the period, thus making it an appealing pick for investors ahead of the upcoming results.\n\nIn Productivity and Business Processes, Microsoft projects revenues between $32.05 billion and $32.35 billion, with model estimates indicating 12.2% year-over-year growth to $32.1 billion. Microsoft is expected to have benefited from sustained Microsoft 365 Commercial cloud growth, with management guiding approximately 14% constant currency (cc) expansion. The segment capitalized on continued ARPU growth through E5 and Microsoft 365 Copilot adoption, while LinkedIn maintained steady performance despite hiring market headwinds. For LinkedIn, the company expects revenue growth in high single digits.\n\nMicrosoft enhanced its competitive position through major Build 2025 conference announcements, including new agent capabilities and enterprise-grade AI tuning features rolled out during the quarter. The Intelligent Cloud segment continues to remain the primary growth engine, with revenue projections between $28.75 billion and $29.05 billion. Our model estimate for this segment is pegged at $28.89 billion, indicating growth of 21.5% from the figure reported in the year-ago quarter. Azure remains the standout performer, with revenue growth projected between 34% and 35% in cc. Microsoft added more AI computing power ahead of schedule in the previous quarter, helping the company meet rising customer demand even with some supply limits continuing past June. The company's $80 billion spending plan for fiscal 2025 helped build more data centers worldwide, with most of the investment happening in the United States.\n\nIn Enterprise Services, revenues are expected to grow in mid-to-high single digits. The company expects Server product revenues to decline in mid-single digits. For More Personal Computing, the company projects revenues between $12.35 billion and $12.85 billion. Our model estimate for this segment is pegged at $12.43 billion, indicating growth of 1% from the figure reported in the year-ago quarter. More Personal Computing is expected to have shown resilience through successful product rollouts, including the deployment of Recall, Click to Do, and enhanced Windows Search features to all Copilot+ PCs during the to-be-reported quarter. The segment received a significant boost from the phenomenal success of A Minecraft Movie, which achieved record-breaking box office performance, exceeding $900 million globally and drove increased weekly active users for the gaming franchise by over 75% year over year.\n\nWindows revenue performance appears contingent on improving PC demand trends. According to the preliminary results from the International Data Corporation Worldwide Quarterly Personal Computing Device Tracker, second-quarter 2025 worldwide PC shipments reached 68.4 million units, growing 6.5% year over year, though Microsoft expects Windows OEM revenues to decline in mid-to-high single digits. The competitive landscape shows mixed results, with Lenovo and Hewlett Packard achieving 15.2% and 3.2% shipment growth, respectively, while Dell Technologies experienced a 3% decline.\n\nIn Gaming, the company expects revenues to grow in mid-single digits. Microsoft expects Xbox content and services revenues to grow in high single digits. This moderate performance in consumer-facing segments contrasts with the stronger enterprise and cloud divisions.\n\nShares of MSFT have gained 21.2% in the year-to-date period compared with the broader Zacks Computer & Technology sector’s increase of 10.8%. Shares of LNVGY and DELL have gained 2.3% and 11.4%, respectively while HPE has lost 3.9% in the same period.\n\nNow, let’s look at the value Microsoft offers investors at current levels. MSFT is trading at a premium with a forward 12-month P/S of 11.99X compared with the Zacks Computer - Software industry’s 8.93X, reflecting a stretched valuation.\n\nMicrosoft presents a compelling investment opportunity ahead of fourth-quarter fiscal 2025 earnings, with an estimated 13.88% revenue growth to $73.71 billion driven by robust AI infrastructure investments and cloud adoption. The company's strategic positioning in enterprise AI through comprehensive platform expansions and Azure's impressive 34-35% cc growth trajectory demonstrate sustainable competitive advantages. Despite premium valuation and intensifying competition, Microsoft's $80 billion investment in global data centers, successful AI integration across productivity suites and strong momentum in the Intelligent Cloud segment position the company for continued market leadership and long-term value creation for shareholders.\n\nMicrosoft's strong fundamentals, driven by AI leadership and cloud dominance, make it an attractive investment despite a premium valuation. With projected double-digit revenue growth, robust Azure expansion and strategic AI investments positioning the company for sustained market leadership, investors should consider buying the stock ahead of fiscal fourth-quarter earnings. The company's comprehensive AI platform strategy ensures long-term competitive advantages and value creation.

Should Investors Buy Microsoft Stock Ahead of Q4 Earnings Release?

The article discusses Microsoft's expected Q4 2025 earnings, projecting 13.88% revenue growth to $73.71 billion driven by AI infrastructure investments and cloud adoption. It highlights strong performance in core segments like Intelligent Cloud and Productivity, with Azure showing 34-35% growth. The company's stock has outperformed the sector, though its valuation is considered stretched. Analysts suggest Microsoft remains an attractive investment despite its premium pricing.