Microsoft Corp is set to report its fourth-quarter and full-year financial results after the market closes on Tuesday. Analysts are eagerly awaiting the earnings report and have high expectations for the tech giant.
According to consensus estimates, analysts predict that Microsoft will report earnings per share (EPS) of $2.55 and revenue of $55.47 billion for the quarter. In the previous year’s fourth quarter, Microsoft reported EPS of $2.23 and revenue of $51.87 billion.
Microsoft has consistently beaten EPS estimates from analysts in the past and has surpassed revenue estimates in the majority of the last 10 quarters. This track record has raised investor optimism regarding the company’s financial performance.
During Microsoft’s third-quarter earnings report, CEO Satya Nadella highlighted the potential of artificial intelligence (AI) for the company. He spoke about how advanced AI models, combined with natural language interfaces, have the power to revolutionize computing.
Analysts have been raising their price targets for Microsoft throughout the year, reflecting their confidence in the company’s growth prospects. Goldman Sachs analyst Kash Rangan reiterated a Buy rating on the stock and raised the price target from $350 to $400 ahead of the earnings report. Rangan sees the expanded addressable market for Microsoft 365 as a significant catalyst for growth.
Wedbush analyst Daniel Ives also expressed optimism, giving Microsoft an Outperform rating and setting a price target of $375. Ives believes that ChatGPT and AI monetization could be the next drivers of growth for the tech giant. He estimates that the monetization of AI alone could add $40 to $50 per share to Microsoft’s valuation.
In terms of market capitalization, Ives predicts that Microsoft could reach a value of $3 trillion by 2024. He sees significant market opportunities in cloud spending and AI, projecting the AI market to be worth $800 billion over the next decade.
Analysts are eagerly awaiting Microsoft’s earnings report to see if the company can meet or exceed expectations. With its strong track record, expanding addressable market, and focus on AI, Microsoft remains a major player in the technology industry.
