Microsoft (NASDAQ:MSFT) Posts Quarterly Earnings Results, Beats Expectations By $0.17 EPS

Key Points

• Microsoft beat quarterly expectations: EPS came in at $4.89 versus the $4.72 consensus, while revenue reached $92.28 billion compared with estimates of $90.62 billion.
• The company raised its quarterly dividend to $0.98 per share from $0.91, implying an annualized dividend of $3.92 and a 0.7% yield.
• Analysts remain broadly bullish: Microsoft has a “Moderate Buy” consensus rating and an average price target of $596.07, although heavy AI infrastructure spending and insider stock sales remain potential risks.

Microsoft (NASDAQ:MSFT - Get Free Report) released its quarterly earnings data on Wednesday. The software giant reported $4.89 EPS for the quarter, topping analysts' consensus estimates of $4.72 by $0.17, FiscalAI reports. The firm had revenue of $92.28 billion for the quarter, compared to the consensus estimate of $90.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.

Microsoft Stock Performance

Shares of MSFT traded down $0.32 during trading hours on Wednesday, reaching $531.01. 23,898,868 shares of the company traded hands, compared to its average volume of 33,400,293. The stock's fifty day moving average is $510.19 and its 200 day moving average is $437.69. The stock has a market cap of $3.94 trillion, a P/E ratio of 29.57, a price-to-earnings-growth ratio of 1.68 and a beta of 1.10. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. Microsoft has a 1-year low of $349.20 and a 1-year high of $551.15.

Microsoft Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be issued a dividend of $0.98 per share. This represents a $3.92 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Thursday, November 19th. This is a positive change from Microsoft's previous quarterly dividend of $0.91. Microsoft's payout ratio is presently 20.27%.

Analysts Set New Price Targets

MSFT has been the subject of a number of analyst reports. Stifel Nicolaus upgraded shares of Microsoft from a "hold" rating to a "buy" rating and lifted their target price for the company from $530.00 to $575.00 in a research note on Tuesday, September 22nd. Citizens Jmp restated a "market outperform" rating and set a $550.00 price target on shares of Microsoft in a research note on Tuesday, September 15th. Oppenheimer raised their price target on shares of Microsoft from $570.00 to $625.00 and gave the company an "outperform" rating in a report on Monday. Benchmark reaffirmed a "buy" rating on shares of Microsoft in a research note on Friday, July 24th. Finally, Evercore upgraded shares of Microsoft from an "underperform" rating to an "outperform" rating in a report on Monday, October 5th. Forty-four investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, Microsoft presently has a consensus rating of "Moderate Buy" and an average target price of $596.07.

Insider Activity at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 4,810 shares of the company's stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the transaction, the executive vice president owned 42,677 shares of the company's stock, valued at $21,188,276.96. This represents a 10.13% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO Satya Nadella sold 86,525 shares of the firm's stock in a transaction that occurred on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the sale, the chief executive officer owned 486,763 shares of the company's stock, valued at $244,092,173.98. This represents a 15.09% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 150,314 shares of company stock worth $75,404,992 in the last three months. Corporate insiders own 0.03% of the company's stock.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Analysts remain broadly optimistic ahead of the report. Consensus expectations call for approximately $4.72 in earnings per share and $90.7 billion in revenue, representing roughly 17% year-over-year growth. Several analysts have maintained Buy or Outperform ratings, while Truist upgraded the stock. Microsoft analyst forecasts
• Positive Sentiment: Microsoft’s Azure business is reportedly approaching or exceeding $100 billion in annual revenue, while its contracted backlog has reached approximately $678 billion. Investors see these figures as evidence of strong long-term demand for cloud and AI capacity. Microsoft contracted backlog
• Positive Sentiment: Anthropic has reportedly committed to spend at least $45 billion on Microsoft cloud infrastructure over seven years, potentially providing significant future Azure demand and supporting Microsoft’s AI ecosystem. Anthropic Microsoft cloud commitment
• Neutral Sentiment: The earnings release will disclose Azure revenue in dollar terms for the first time, giving investors a clearer measure of cloud scale. Options markets imply a roughly 5% post-earnings move, highlighting elevated volatility risk. Microsoft earnings report preview
• Negative Sentiment: Microsoft is spending heavily—potentially up to $175 billion to $190 billion in 2026—on AI data centers and related infrastructure. Investors want proof that revenue is scaling quickly enough to protect margins and generate attractive returns on that capital.
• Negative Sentiment: The company’s offer of voluntary buyouts to roughly 60,000 employees has raised concerns that Microsoft is restructuring aggressively to control costs and fund its AI push. Although lower headcount could improve efficiency, the scale of the program may signal pressure from rising infrastructure expenses. Microsoft buyout program
• Negative Sentiment: Higher interest rates pose an additional risk to Microsoft’s premium valuation and to the broader AI trade, as rising financing costs can compress technology multiples. The Federal Reserve’s policy decision is therefore another near-term catalyst for MSFT.

Microsoft Company Profile

Microsoft Corporation NASDAQ: MSFT is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company's principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.

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