Microsoft Stock Up 30% in Three Months Ahead of October 27 Earnings Test

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Microsoft stock has climbed about 30% over the past three months, including a 19% jump in the two trading days after its July report, yet it trades slightly lower than a year ago while the S&P 500 gained about 17%. At near $500 a share, the stock trades at about 27 times trailing profits, below its three-year average of about 32 times, though those profits rest on a net margin of about 40%, the highest in at least five years. Microsoft spent about $116 billion on capital projects over the past year, nearly double the prior year, while free cash flow slipped to $67.0 billion from $71.6 billion, and the company carries a valuation of about $3.67 trillion. Azure demand still exceeds available capacity, with Azure and other cloud services revenue up 43% in fiscal Q4 2026, and management guides fiscal Q1 2027 capital spending to over $50 billion. For fiscal Q1 2027, Microsoft guides revenue of $89.85 billion to $90.95 billion against consensus of $90.66 billion, with the next report expected on or around October 27; management expects Windows OEM and Devices revenue to decline by a percentage in the low 20s, leaving the beat mainly to Azure, where growth is expected to accelerate in the first half of fiscal 2027.

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Guides fiscal Q1 2027 capex over $50 billion and revenue above consensus, with earnings due October 27.

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