Microsoft to Report Fiscal Q4 Earnings Today: ETFs to Watch

Microsoft MSFT is set to release its fourth-quarter fiscal 2025 results today after market close. It is worth taking a look at this leading software company’s fundamentals ahead of its results (read: ETFs to Surge as Microsoft Tops $3.5T, Reclaims Top Spot).

Microsoft stock has gained about 30% over the past three months, outperforming its sector’s growth of 21.9%. It hit new all-time highs in the recent trading session, with analysts being bullish ahead of the results. ETFs having double-digit exposure to this software leader are currently in focus. These are T-Rex 2X Long Microsoft Daily Target ETF MSFX, Global X PureCap MSCI Information Technology ETF GXPT, iShares Global Tech ETF IXN, iShares Dow Jones US Technology ETF IYW and Vanguard Information Technology ETF VGT.

Earnings Whispers

Microsoft has an Earnings ESP of -0.64% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

This software maker saw no earnings estimate revision over the past 30 days for the fourth quarter of fiscal 2025. Its earnings track record is impressive, with the four-quarter earnings surprise being 5.21%, on average. The Zacks Consensus Estimate indicates earnings growth of 13.56% and revenue growth of 13.88% from the year-ago quarter. 

Microsoft Corporation Price, Consensus and EPS Surprise

Microsoft Corporation price-consensus-eps-surprise-chart | Microsoft Corporation Quote

Wall Street analysts have an average recommendation of 1.23  (made by 47 brokerage firms) on a scale of 1 to 5 (Strong Buy to Strong Sell). Of them, 39 are Strong Buy and five are Buy. Strong Buy and Buy, respectively, account for 82.98% and 10.64% of all recommendations.  Based on short-term price targets offered by 41 analysts, the average price target for Microsoft is $554.30, ranging from a low of $475.00 to a high of $626.00. 

MSFT has a Growth Score of B, indicating that the software maker is primed for growth in the weeks ahead. At current levels, Microsoft's stock trades at 34.36X forward earnings, a premium to the Zacks Computer-Software industry average of 26.68X.

What to Watch

The world's largest software company will continue to grow as artificial intelligence applications drive more cloud infrastructure usage. Microsoft's Azure cloud business is benefiting from the company's partnership with AI leader OpenAI. However, investor focus is increasingly turning toward potential headwinds as OpenAI explores closer collaborations with other tech giants, including Google (GOOGL), Oracle (ORCL) and CoreWeave (CRWV). 

Wall Street is clearly bullish on the world's largest software company heading into the results, raising the target price on the stock. Evercore ISI raised its price target to $545.00 from $515.00, citing that the company’s momentum in Azure and AI will continue to drive "durable double-digit top and bottom line growth.” Wedbush lifted the price target to $6000. According to Wedbush, the company "is just hitting its next phase of monetization on the AI front," thanks to the adoption of Copilot, its chatbot and the cloud-computing platform Azure.

On the last earnings call, the software maker expects revenues of $70 billion and earnings per share of $3.46 for the fiscal fourth quarter of 2025.

ETFs With Exposure to MSFT Stock in Focus

T-Rex 2X Long Microsoft Daily Target ETF (MSFX) 

T-Rex 2X Long Microsoft Daily Target ETF seeks to magnify (200%) the daily performance of Microsoft stock. It charges 1.05% in annual fees and has accumulated $9.1 million in its asset base (read: Single-Stock ETFs in Focus as Big Tech Earnings Unfold). 

Global X PureCap MSCI Information Technology ETF (GXPT) 

Global X PureCap MSCI Information Technology ETF seeks to provide uncapped, market capitalization exposure to the Information Technology sector. It follows the MSCI USA Information Technology Index, holding 83 stocks in its basket. Microsoft occupies the second position with a 19.3% share. Global X PureCap MSCI Information Technology ETF has gathered $0.3 million in its asset base since its debut last week. It charges 15 bps in annual fees. 

iShares Global Tech ETF (IXN) 

iShares Global Tech ETF provides exposure to electronics, computer software and hardware, and information technology companies by tracking the S&P Global 1200 Information Technology 4.5/22.5/45 Capped Index. Holding 120 stocks in its basket, Apple occupies the second spot with a 17.6% share. iShares Global Tech ETF has amassed $5.7 billion in its asset base and trades in a good volume of 132,000 shares a day, on average. The expense ratio is 0.41%. 

iShares U.S. Technology ETF (IYW)

iShares U.S. Technology ETF provides exposure to U.S. electronics, computer software and hardware, and information technology companies. It tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, holding 140 securities in its basket. Of these, Microsoft occupies the second position in the basket, with 15.8% of the assets. iShares Dow Jones US Technology ETF has AUM of $22.5 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges nearly 685,000 shares a day. IYW has a Zacks ETF Rank #2 with a Medium risk outlook. 

Vanguard Information Technology ETF (VGT)

Vanguard Information Technology ETF manages about $98.3 billion in its asset base and provides exposure to 319 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, MSFT occupies the second position with a 14.9% share. Vanguard Information Technology ETF has an expense ratio of 0.09%, while volume is solid at nearly 423,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook.

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This article originally published on Zacks Investment Research (zacks.com).

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