CFO Amy Hood said on the call that fourth-quarter capital expenditure will rise sequentially from the $21.4 billion spent in the previous three-month period.

Microsoft Corp. (MSFT) shares jumped in Thursday’s premarket session after the software giant allayed investors’ fears with a resounding quarterly beat and upbeat outlook. The company also downplayed the impact of the ongoing tariff headwinds.

Following the results, Wedbush’s Daniel Ives upped his price target for Microsoft stock to $515 from $475. The tech bull said, “MSFT delivered an Aaron Judge-like quarter featuring beats across the board with FY4Q25 guidance coming in stronger than expected.” 

The analyst noted that the company continued to capitalize on the artificial intelligence (AI) momentum across its tech stack.

He highlighted the 33% year-over-year (YoY) revenue growth (35% in constant currency) for Azure - Microsoft’s public cloud business -  which came in above the 31% consensus estimate. Rival Alphabet’s (GOOG) (GOOG) Google Cloud revenue was up a more modest 28%.

CFO Amy Hood said on the call that fourth-quarter capital expenditure will rise sequentially from the $21.4 billion spent in the previous three-month period. It reaffirmed the $80 billion capex guidance for the fiscal year.

Ives said this meant the company continued to double down on its AI monetization strategy. 

The company guided Azure's constant currency revenue growth of 34%-35% for the fourth quarter.

Barclays also increased the price target for the stock to $494 from $430, The Fly reported, and maintained an ‘Overweight’ rating. Analysts at the firm said Microsoft has “significantly” surprised investors, which doesn't often happen with mega-cap techs.

The firm expects the Azure reacceleration to drive shares higher from here.

Q3 Results

Microsoft reported earnings per Share (EPS) of $3.46 and revenue of $70.07 billion for the third quarter of the fiscal year 2025, up from $2.94 and $61.86 billion a year ago.

The results exceeded the Finchat-compiled consensus estimates of $3.22 and $68.44 billion, respectively.

Revenue contribution from businesses: 

  • Productivity and Business Processes: $29.94B (10.4% YoY growth)
  • Intelligent Cloud: $26.75B (20.8%)
  • More Personal Computing: $13.37B (6.1%)

 

Looking ahead, Microsoft guided to 11-12% constant currency growth for the Productivity and Business Processes business ($32.05B-$32.35B) and 20%- 22% growth for the Intelligent Cloud business ($28.75B-$29.05B).

It expects More Personal Computing revenue to decline sequentially from $12.35 billion to $12.85 billion.

Retail Mood

On Stocktwits, retail sentiment toward Microsoft stock was ‘extremely bullish’ (92/100) early Thursday, and the message volume was ‘extremely high.’

MSFT sentiment and message volume as of 5:16 a.m. ET, May 1 | source: Stocktwits

Following the third-quarter print, a bullish watcher said Microsoft was a “$550+ stock” trading at a discount.

Another user lauded the resilience of companies such as Microsoft. “So looks like the world doesn’t end with tariffs, and big tech is still in charge,” they said.

In the premarket session, Microsoft stock climbed 8.16% to $427.52. It is down 6% for 2025. and  also trades well off the July 2024 all-time high of $468.35.

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