Microsoft earnings preview: After a $357B wipeout, tech giant gets another chance

Microsoft heads into fiscal Q3 results with the market focused less on traditional beats and more on cloud growth, capital spending and AI concentration risk. Analysts expect ~$81.4B revenue and $4.06 EPS; Azure is guided to 37–38% CC growth. Investors remain wary after a prior earnings beat triggered a 10% one-day selloff that erased $357B, and MSFT is ~22% below its 52-week high. Key watch items: whether Azure outperforms expectations (and how capacity allocation to Copilot/internal use affects the print), disclosures on Copilot adoption (15M paid seats = 3.3% of the commercial base), and signs of moderating or continued elevated capex (Q2 capex was $37.5B; fiscal-2026 capex on pace to exceed $100B). The report’s implications extend across Big Tech — Amazon, Google and Meta report the same afternoon — so relative cloud metrics could drive sector moves. Mixed analyst views mean upside from any clear Azure/Copilot momentum, but concentrated OpenAI exposure and high spending keep downside risk elevated.