Microsoft Corp (NASDAQ:MSFT) will report its fiscal fourth quarter earnings on Tuesday, July 30 and analysts at the Bank of America see upside in the company’s revenue for the period.
Wall Street analysts on average expect Microsoft to post revenue of $64.2 billion and earnings per share of $2.90 for Q4.
The BofA analysts see a 1% upside to their estimate of $64 billion, which represents growth of 14% year-over-year, driven by Azure strength, Office E3/E5 premium mix, Copilot traction and a normalizing PC/Windows buying environment.
They see Azure strength balanced across sustained AI and core workload strength, which should translate into growth of 31.5%, compared to their base of 30.5%.
Copilot's early traction is expected to accelerate Office growth, maintaining the current multiple, they believe.
In More Personal Computing (MPC), they expect $50 million upside to the $15.5 billion estimate, supported by stronger-than-expected PC shipments.
Looking at Microsoft’s fiscal 2025 forecasts, the analysts expect double-digit revenue growth continuation on sustained Azure and Office strength and a 100 basis point decrease in margins due to increased capex driving a higher cost of sales.
“In an upside case, we believe the Office business could be on track to achieve 20% growth by Q1 fiscal 2026,” the analysts wrote.
The bank’s analysts reiterated their ‘Buy’ rating and raised their price target to $510 from $480 on the potential for higher Office growth in fiscal 2025.
They believe shares are pricing in a “fair amount” of near-term upside.
Microsoft shares traded hands at $440 on Wednesday.