Microsoft Set To Report Q2 2026 Earnings: Analysts Eye Azure Growth, AI Spending, CapEx As Shares Dip Over 6% In 6 Months

Microsoft Corp. (NASDAQ:MSFT) is set to release its second-quarter 2026 earnings on Wednesday, with investors and analysts closely watching cloud growth, AI investments, and capital expenditures amid a six-month stock slump.

Analysts Predict Strong Cloud Performance

For the second quarter, Wall Street expects Microsoft to report earnings per share of $3.86 and revenue of $80.26 billion, up from $3.23 EPS and $69.63 billion revenue in the same quarter last year, according to Benzinga Pro data.

The company has a track record of consistently exceeding expectations, having beaten EPS and revenue estimates for 11 consecutive quarters.

Investors are particularly focused on Azure, Microsoft's flagship cloud platform, which continues to be a key growth engine.

Microsoft Q1 Revenue, EPS Beat Estimates

In October 2025, Microsoft announced first-quarter revenue of $77.7 billion, marking an 18% increase compared with the same period last year and surpassing the Street's consensus estimate of $75.3 billion, according to Benzinga Pro data.

The company posted earnings per share of $4.13, also beating analysts' projection of $3.67.

At the time, Microsoft provided Q2 guidance, forecasting revenue between $79.5 billion and $80.6 billion (14%–16% growth).

The tech giant also noted that commercial cloud margins could remain under pressure, with higher capital expenditures and ongoing capacity constraints expected through the end of the fiscal year.

AI Investments, Capital Spending In Focus

Investors will also be watching Microsoft's capital expenditures closely.

The company has faced scrutiny over its heavy spending on AI infrastructure, which can weigh on short-term margins but potentially position Microsoft for long-term dominance in artificial intelligence services.

Goldman Sachs analyst Gabriela Borges reiterated a Buy rating on the stock with a price target of $655, noting the risk/reward remains favorable ahead of the earnings report.

Similarly, Wedbush analyst Dan Ives maintained an Outperform rating and a $625 price target, citing Azure growth and AI initiatives as key drivers.

Maia 200 AI Chip: Microsoft's Next-Gen AI Hardware

Earlier this week, Microsoft unveiled its Maia 200 chip, designed to accelerate AI workloads for enterprise and cloud applications.

The chip features over 100 billion transistors, delivers 10 petaflops in 4-bit precision and roughly 5 petaflops in 8-bit performance, marking a significant upgrade from the 2023 Maia 100.

The new chip underscores Microsoft's push to strengthen its Intelligent Cloud offerings and compete with other tech giants in AI infrastructure. Analysts say it could give Azure a technological edge in running large-scale AI models efficiently.

Stock Outlook And Analyst Sentiment

Microsoft shares have declined 6.45% over the past six months, but analysts remain optimistic.

The consensus price target among 34 analysts is $615.91, with a high of $675 and a low of $490. The three latest ratings suggest an implied upside of roughly 21%, fueled by continued cloud adoption and AI innovation.

Microsoft stock scores high on Benzinga Edge's Quality ranking, showing strong short and long-term price trends despite a softer medium-term outlook.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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