Microsoft to Report Q1 Earnings Wednesday; Wall Street Focuses on Azure Growth, EPS Seen at $4.27

Microsoft (MSFT) reports fiscal first-quarter results after the market close on Wednesday, with investors seeking clarity on demand for its AI applications and services and on Azure's growth trajectory. Wall Street consensus, per Bloomberg, expects earnings per share of $4.27 on revenue of $90.6 billion, up from $4.13 and $77.6 billion a year earlier. The "agentic and infrastructure" unit, which includes Azure and Microsoft 365, is projected to post revenue of $75.6 billion, up 22.5%, with Azure at $32.2 billion and Microsoft 365 at $27.4 billion. The devices and consumer segment is seen falling 6% to $15 billion. Capital expenditures, including leases, are expected to exceed $45.9 billion, versus $19.3 billion a year earlier. Remaining performance obligations are forecast at $705.6 billion, up 77% from $389 billion. The quarter marks Microsoft's first under a new two-segment structure announced in the prior quarter. Two days before the report, Microsoft offered voluntary buyouts to more than 60,000 eligible employees to curb costs amid its AI infrastructure buildout. The stock has risen about 35% since July.