You won't believe what I discovered in Memphis (From Brownstone Research) Microsoft Blasts Past Earnings—What’s Next for MSFT?  Key Points - Microsoft delivered a Q4 EPS beat of $3.65 vs. $3.35 expected, with revenue up 18% YOY to $76.44 billion.
- Azure revenue hit $75 billion in FY2025, and cloud growth accelerated to 39% YOY.
- Consider a bullish call spread or wait for a pullback to the 50-day SMA to initiate a long position in MSFT stock.
Microsoft Corp. (NASDAQ: MSFT) is reminding investors why it’s a market bellwether. Shares are up more than 6% after a blowout earnings report driven by artificial intelligence (AI) and cloud growth. Investors who hold Microsoft stock in their portfolio have been well rewarded. The stock is up 21% year-to-date and has gained nearly 30% since the rally began in April. While the report didn’t give any indication that growth was slowing down, the stock is trading at a generous premium, even among technology stocks. However, this may be a case where the premium is justified. Microsoft Beat Elevated Expectations A common risk for a stock like Microsoft is the pressure to beat high expectations. After a strong earnings report in April, the bar was high. It’s safe to say Microsoft cleared the bar. Earnings per share (EPS) of $3.65 beat expectations of $3.35 and were 23% higher year-over-year (YOY). This was Microsoft’s fourth quarter report for its 2025 fiscal year, and the company’s full-year EPS of $13.64 was 15% higher than the $11.81 it reported in its fiscal year 2024. A similar story was evident on the top line. Microsoft delivered $76.44 billion in revenue, which beat expectations for $73.81 billion. The number was also 18% higher YOY. Microsoft also reported 39% growth in its Azure cloud computing business. That was up from 34.4% in FY 2024. However, for the first time, the company gave investors a dollar number for Azure revenue. In this case, that was $75 billion for the full year. This is a notable milestone that underscores the scale of its cloud business. Investors were also focused on Microsoft's comments about its capital expenditures in AI. The company reaffirmed its prior forecast for $60 billion in capex spending, with AI being the primary driver for that spending. Wedbush Just Raised Its Price Target... Again Dan Ives of Wedbush has been among the most bullish analysts on Microsoft. The company’s earnings report has done nothing to tame his bullish outlook. Ives raised his price target for MSFT stock to $625 from $600. That’s a 15% gain from the stock’s $538.96 price as of this writing. Robots are no longer science fiction — they're the next trillion-dollar megatrend.
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