Investors will focus on the performance of Microsoft’s Azure cloud unit and any updates around its spending plan.

  • Microsoft recently announced a voluntary employee exit plan, for which 60,000 workers are eligible, according to media reports.
  • Scotiabank, Oppenheimer and Truist raised their price targets on MSFT earlier this week.
  • Retail sentiment for MSFT was ‘bearish’ on Wednesday.

Microsoft Corp. (MSFT) stock dipped 0.4% in premarket trading on Wednesday, ahead of the Windows maker’s fiscal first-quarter report, due after market close.

Despite recent weakness amid a broad selloff in AI-linked stocks, MSFT trades near an all-time high. The company recently announced a voluntary exit plan for employees and would likely face questions around it in the analyst call.

Around 60,000 people, or about 27% of Microsoft’s total workforce of 223,000 people, are eligible for the buyout, according to media reports. The cuts would free up resources as the company ramps up spending on data centers.

In April, Microsoft announced a first-ever voluntary retirement program that around 7% of U.S. employees were eligible for, and in July announced plans to lay off 4,800 employees.

Expectations For Microsoft’s Q1

In particular, analysts and investors will focus on the performance of Microsoft’s Azure cloud unit and any updates around its spending plan. 

Azure revenue grew 43% year-over-year in fiscal Q4 FY26. At the time, the company said it would spend more than $50 billion on capital expenditures in Q1.

Overall, analysts expect revenue to rise 17% to $90.74 billion and adjusted profit to increase 14% to $4.72 per share. Alphabet (GOOGL) will also report its Q3 results after the market closes.

Analysts Raise Price Targets Ahead Of Microsoft’s Report

Earlier this week, at least three brokerages raised their price targets on Microsoft. Scotiabank raised its target to $625 from $615 and maintained an ‘Outperform’ rating, citing solid Copilot checks and calling the company “a leading horseman of the AI revolution.”

Oppenheimer raised the target to $625 from $570, maintaining an ‘Outperform’ rating. It said that in the cloud space, infrastructure availability, not demand, was the constraint, and as such, expect a clear path for sustained growth in Azure and M365 software suite.

Truist raised its target to $600 from $575 and maintained a ‘Buy’ rating. Currently, 54 of 57 analysts recommend ‘Buy’ or higher, per Koyfin. Their average price target of $605.12 implies 14% upside from the stock’s Tuesday closing price.

Retail View On MSFT

On Stocktwits, the retail sentiment for MSFT was ‘bearish,’ unchanged over the past two weeks. 

“$MSFT made 39% in 3 months so I decided to sit out the ER. Sold it all but ready to jump back in if price pulls back tomorrow as long as the overall ER was good. I just think there will be a moderate pullback if they just meet or only slightly exceed expectations,” said a trader.

Another trader called the reports from Microsoft and Alphabet “a bit test for the AI trade.” They said the market will be laser focused on After the recent CapEx scare and this week’s rebound, the market will be “laser-focused on: Cloud growth, AI spend guidance, and Any sign of monetization catching up.”

Year to date, MSFT stock is up 10.6%. 

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