Microsoft (MSFT) Q3 2025 Earnings Preview: What Should Investors Expect?

Source Tradingkey

TradingKey - Microsoft will report its 2025Q3 earnings on 30th of April, after the market closes. As one of the big tech companies and part of the Mag 7, Microsoft earnings are always seen as important news.  These are the following aspects investors should pay attention to:

The stock price now is 13% lower than the peak three months ago and the forward PE is standing at 28x, a valuation neither high nor very low considering the growth prospects.

Revenue and Earnings:

The market expects $68.44 billion in revenue and $3.22 earnings per share, 10.6% and 9.7% growth from 2024Q3. The top-line growth shows a certain level of slowdown which can be explained by the maturing market, increased competition and general economic slowdown.

While the revenue number is usually quite easy to predict, the EPS number may fluctuate a lot due to the investment in OpenAI. Last quarter, Microsoft recorded a $1.17 billion loss from the OpenAI investment in its income statement, and we expect this number to increase in the coming quarters, as OpenAI is ramping up investments.

MSFT Businesses Amidst Tariffs:

We believe the software business of MSFT won’t be affected much by the current tariff environment, as the focus of the tariffs doesn’t include software products. However, the business related more closely with personal computing might take a hit due to the worsened consumer sentiment.  

The cloud segment will be subject to scrutiny, as this is the fastest growing business line of the company, and it’s also closely related to the development of AI. In the past quarters Microsoft cloud saw a very high rate of growth of around 20% but due to the supply chain (infrastructure) bottleneck affecting all the cloud players, the cloud operating margins have been quite stagnant.

 Figure 1: Microsoft

Source: Company Reports

The most recent earnings from Alphabet showed Google Cloud margin flat compared with the previous quarters, implying that we won’t see dramatic ramp up in cloud profitability for Microsoft either.  

AI Race Is Far from Over

Even though the main narrative for the equity markets now is tariffs, AI continues to be the centerpiece of the future for the big tech firms. As one of the major AI scalers, it is important for investors to follow the AI developments of the company including:

Capital Expenditures: MSFT plans to spend $80 billion of capex mainly for AI and data centers, thus investors would expect any news on the ROI of this massive amount of spedning.  Any guidance from the management with regard to potential change in the capex plans will also be a valuable insight.

Partnership with OpenAI: OpenAI is perhaps the most important AI company in the world and Microsoft as one of the major investors in it is already tied with the future performance of the Sam Altman’s company. Investors should look for any development in the partnership between the two companies, as well as any change in the terms of their business conditions.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Ethereum Price Explodes Past $2,200 with 25% Surge—Momentum Builds FastEthereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
Author  NewsBTC
May 09, Fri
Ethereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
placeholder
Avalanche Price Forecast: AVAX eyes $30 as FIFA, VanEck back blockchain ecosystemAvalanche (AVAX) is gaining bullish momentum, extending gains on Friday, trading at $25.74 as investor confidence grows on the back of two major developments.
Author  FXStreet
May 23, Fri
Avalanche (AVAX) is gaining bullish momentum, extending gains on Friday, trading at $25.74 as investor confidence grows on the back of two major developments.
placeholder
Gold edges higher after Trump’s bill boosts bond market uncertaintyGold (XAU/USD) price extends its weekly gains, trading near $3,330 at the time of writing on Friday, up nearly 1% on the day, on a new tailwind for the safe haven precious metal.
Author  FXStreet
May 23, Fri
Gold (XAU/USD) price extends its weekly gains, trading near $3,330 at the time of writing on Friday, up nearly 1% on the day, on a new tailwind for the safe haven precious metal.
goTop
quote