The Future of Microsoft: What to Expect from Q3 2024 Earnings Report
Key Takeaways
- Microsoft is set to report earnings for the third quarter of its 2024 fiscal year on Thursday after the bell.
- Analysts are expecting its revenue and adjusted profit to rise from the year-ago period.
- Investors will likely be watching for Microsoft’s cloud segment growth, which drove an earnings beat in the second quarter.
- Microsoft could also provide updates about its artificial intelligence (AI) projects, with analysts noting that the company could be well-positioned for AI-driven growth.
Microsoft (MSFT) is gearing up to release its earnings report for the third quarter of the 2024 fiscal year on Thursday after the market closes. Investors are eagerly anticipating this report, particularly focusing on the growth of Microsoft’s cloud segment and any updates regarding artificial intelligence (AI) projects in collaboration with OpenAI.
Analysts have projected Microsoft’s revenue for the quarter to be around $60.87 billion, a slight decrease from the previous quarter but a significant increase from the same period last year. Adjusted net income is expected to reach $21.13 billion, showing growth from both the previous quarter and the prior-year quarter. Adjusted earnings per share (EPS) are estimated at $2.84, reflecting a slight decline from the previous quarter but an improvement from a year earlier.
| Analyst Estimates 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 | $21.87 billion | $18.3 billion |
Key Metrics: Cloud Revenue Driven by Azure
Investors are particularly interested in Microsoft’s intelligent cloud business, which played a crucial role in the company’s successful second-quarter earnings. Analysts at CFRA predict that revenue for the entire Intelligent Cloud segment could grow by 19%, primarily fueled by Azure, Microsoft’s cloud platform. The firm expects Azure to grow by 29%, with AI contributing at least six to eight percentage points to this growth.
CFRA analysts anticipate sustained growth in this segment, emphasizing the significant role of AI in driving this expansion. Bank of America analysts share this sentiment, believing that Microsoft is well-positioned for continued growth over the next 3-5 years, driven by Azure adoption and cloud-based productivity solutions like Office 365.
Business Spotlight: AI Updates
Microsoft’s AI initiatives are also in the spotlight, as the company has established itself as a leader in the AI space through partnerships with OpenAI and other ventures. Analysts expect Microsoft to provide updates on its AI projects, with CFRA analysts projecting double-digit growth through 2025 and potential for multiple expansion.
The partnership with OpenAI has positioned Microsoft to capitalize on AI-related revenue quickly, outpacing other cloud and software providers in this space. Bank of America analysts highlight upcoming AI product cycles as potential catalysts for Microsoft’s stock performance in the coming quarters.
As of now, Microsoft shares have seen a 7% increase this year, trading at $400.66 as of the latest update. The future looks promising for Microsoft, with its cloud and AI initiatives paving the way for sustained growth and innovation.
In conclusion, Microsoft’s upcoming earnings report is highly anticipated by investors, with a focus on cloud segment growth and AI developments. The company’s strong financial performance and strategic partnerships position it well for continued success in the evolving tech landscape.
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