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
U.S.-Iran Ceasefire. Bitcoin Surges Past $72,000, 80,000 Within Reach?The U.S.-Iran ceasefire agreement triggered a surge in Bitcoin of over 4%, with the Islamabad negotiations starting this Friday serving as a key driver for further gains.On April 8, a bri
Author  TradingKey
11 hours ago
The U.S.-Iran ceasefire agreement triggered a surge in Bitcoin of over 4%, with the Islamabad negotiations starting this Friday serving as a key driver for further gains.On April 8, a bri
placeholder
Is 19% Oil Price Slump Just the Surface? Doubts Over Strait of Hormuz Reopening Details; EIA Warns of Continued Rise in US Fuel Prices On April 7, Eastern Time, Trump announced a truce, suspending bombing and offensive operations against Iran for two weeks and reopening the Strait of Hormuz.Affected by this, WTI crude at
Author  TradingKey
12 hours ago
On April 7, Eastern Time, Trump announced a truce, suspending bombing and offensive operations against Iran for two weeks and reopening the Strait of Hormuz.Affected by this, WTI crude at
placeholder
Today’s Market Recap: U.S.-Iran “Two-Week Ceasefire,” Three Major U.S. Indices Recover Losses, Oil Prices Plunge, Gold Prices Return to $4,800TradingKey - During the U.S. stock trading session on April 7 ET, Trump threatened Iran that "the entire civilization will perish," causing the three major indices to fall in tandem, with the Nasdaq d
Author  TradingKey
19 hours ago
TradingKey - During the U.S. stock trading session on April 7 ET, Trump threatened Iran that "the entire civilization will perish," causing the three major indices to fall in tandem, with the Nasdaq d
placeholder
WTI Price Forecast: Seems vulnerable near $90.50 as technical breakdown comes into playWest Texas Intermediate (WTI) – the benchmark US Crude Oil price – plummets to a nearly two-week trough during the Asian session on Wednesday in reaction to news that the US and Iran have agreed to a two-week ceasefire.
Author  FXStreet
19 hours ago
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – plummets to a nearly two-week trough during the Asian session on Wednesday in reaction to news that the US and Iran have agreed to a two-week ceasefire.
placeholder
Trump Openly Seizes Oil, Threatening to “Control Iran Overnight.” WTI Crude Has Doubled to $115 This Year; Will Oil Prices Face More Variables?On April 6, Trump remarked regarding the Iran issue that he could "control the entire country overnight" and indicated that the deadline for ceasefire negotiations could be tomorrow (the
Author  TradingKey
Yesterday 08: 01
On April 6, Trump remarked regarding the Iran issue that he could "control the entire country overnight" and indicated that the deadline for ceasefire negotiations could be tomorrow (the
goTop
quote