{"id":789447,"date":"2026-07-28T14:32:14","date_gmt":"2026-07-28T14:32:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/789447\/"},"modified":"2026-07-28T14:32:14","modified_gmt":"2026-07-28T14:32:14","slug":"microsoft-to-report-q4-earnings-as-investors-look-for-return-on-ai-investments","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/789447\/","title":{"rendered":"Microsoft to report Q4 earnings as investors look for return on AI investments"},"content":{"rendered":"\n

Microsoft (MSFT<\/a>) will report its fourth quarter earnings after the bell on Wednesday as the parade of Big Tech earnings announcements marches on. <\/p>\n

Shares of the Windows developer have declined more than 18% since the start of the year as investors question the company’s AI spending and look for signs that Microsoft is seeing strong returns on its massive investments. <\/p>\n

Rivals Amazon (AMZN<\/a>) and Google (GOOG<\/a>, GOOGL<\/a>) are up less than 1% and more than 3%, respectively, during the same period. <\/p>\n

Microsoft, like much of the tech industry, has been beset by concerns about aggressive capital expenditure and its impact on the company’s free cash flow, as well as whether those investments are paying off in terms of improved revenue. <\/p>\n

But Microsoft is also capacity-constrained, making it unable to meet demand for its AI services. Investors, however, could balk at further spending increases even if they could help ease those constraints. <\/p>\n

Last week, Google parent Alphabet said it plans to spend between $195 billion and $205 billion on capex for the year, up from its prior estimate of $180 billion to $190 billion and well ahead of analysts’ expectations of $186.4 billion. That sent Alphabet stock tumbling more than 6% on the day<\/a>. <\/p>\n

For the quarter, Microsoft is expected to spend $35.2 billion on capex excluding capital leases, up 106% year over year, according to Bloomberg data. <\/p>\n

In a note to investors, BofA Global Research’s Tal Liani wrote that Microsoft will have to show Azure cloud growth of 39% to 40% or better to help calm spending-related jitters. <\/p>\n

Cantor’s Thomas Blakey, however, stated in an investor note that he believes capex growth will slow in Microsoft’s fiscal 2027 after coming in higher than anticipated in its fiscal 2026. <\/p>\n

Overall, Microsoft is expected to post earnings per share of $4.25 on revenue of $87.7 billion, topping the $3.65 and $76.4 billion the company saw in Q4 last year. <\/p>\n

The company’s Intelligent Cloud segment is projected to bring in $38.1 billion, a 12% increase from the same period last year. Azure revenue is estimated to reach $39.5 billion. <\/p>\n

Remaining performance obligations, or contracts Microsoft must still deliver on, are expected to grow 72% to $647.6 billion. <\/p>\n

Microsoft’s Business Productivity and Business Processes segment is anticipated to see revenue of $37.3 billion, up 12.5%, while its More Personal Computing business revenue is expected to decline 9.5% to $12.1 billion. <\/p>\n

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