Should You Buy Microsoft Stock Before July 29?

Microsoft (NASDAQ: MSFT) is having an uncharacteristically bad year thus far in 2026. Entering trading this week, it's down around 20% as the market has been bearish on software stocks as a whole, related to concerns about artificial intelligence (AI). Rightly or wrongly, Microsoft's stock has struggled to turn things around.

Later this month, however, on July 29, the company reports its all-important earnings numbers. They will be particularly crucial as they will also be its year-end numbers, and its guidance for the year ahead could be of most importance to investors, as it may offer proof that the business isn't in as bad a shape as its recent stock performance might suggest.

While Microsoft's stock isn't trading at its 52-week low anymore, its valuation remains modest. Is now a good time to buy the tech stock, before it posts its latest numbers?

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Microsoft's track record hasn't been good of late

When a company releases its latest earnings numbers, it can have a significant impact on its share price. Unfortunately, in Microsoft's case, the last three times it posted earnings, the stock would proceed to fall in value, sometimes sharply.

MSFT data by YCharts

While this might seem bad, expectations may also be a bit lighter for the business going into the upcoming earnings release, given how much negativity may be priced in at this stage. Recently, Microsoft also announced significant layoffs and a "reset" for its Xbox business amid underwhelming results. Between AI-related concerns, worries of cloud business Azure slowing down, and now an Xbox turnaround, there are an increasing number of things that investors will be watching for when Microsoft reports its latest earnings numbers this month.

Why Microsoft stock still looks worth buying, despite the uncertainty

Buying a stock based on how it might do when it releases earnings is dangerous and risky. A company can post strong numbers, and there may still be something that the market didn't like about the guidance or some commentary that came out. The market can be fickle that way. And just because the stock has a good or bad track record after earnings in the past doesn't mean that trend will continue.

Investing based on fundamentals and focusing on a long-term outlook is going to yield safer results for investors than looking at just the short term. Whether or not Microsoft beats expectations for the current quarter is irrelevant. What matters is that with a reasonable valuation (the stock trades at 23 times its trailing earnings), a robust business, and promising growth opportunities, Microsoft can make for a fantastic stock to buy right now.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.