Microsoft Stock Could Reclaim Its 200-Day Moving Average After Earnings

Microsoft's (MSFT) fiscal third-quarter performance demonstrated exceptional strength, with the tech giant’s revenue soaring to $70.07 billion and earnings per share reaching $3.46, significantly surpassing Wall Street's expectations. The cloud division emerged as a standout performer, with Microsoft Cloud revenue climbing to $42.4 billion, representing a robust 20% year-over-year growth, while Azure and other cloud services delivered an impressive 33% surge.

The market has responded positively to these results, with MSFT stock rising more than 5% in after-hours trading to around $417 per share. That puts Microsoft on pace to challenge its 200-day moving average in Thursday’s session, which hasn’t been toppled on a daily closing basis since the stock’s Jan. 29 post-earnings bear gap.

What Drove Q3 Growth at Microsoft

The integration of artificial intelligence (AI) technology has proven to be a crucial growth catalyst, contributing 16% to Azure's overall expansion and highlighting Microsoft's successful execution of its AI strategy. The Intelligent Cloud segment generated substantial revenue of $26.8 billion, while the More Personal Computing division exceeded expectations with revenue of $13.4 billion against projected figures of $12.6 billion. The Productivity and Business Processes segment also demonstrated strong performance, generating revenue of $29.9 billion.

While the company faces some capacity constraints in meeting AI service demands and has strategically adjusted by slowing certain early-stage projects, Microsoft maintains its position as a leader in the rapidly growing AI industry, which is projected to reach $225 billion by 2027. Despite broader economic concerns about potential tariff impacts, Microsoft's diverse portfolio and strong execution have positioned it well for continued growth in the evolving technology landscape.

Analysts Say MSFT Stock is a ‘Strong Buy’

On average, MSFT stock has a “Strong Buy” rating from the 45 analysts in coverage. The mean price target from this group is $490.75, representing a premium of just over 24% to Wednesday’s close.

Along with its market-beating returns over the long haul, it’s worth pointing out that MSFT stock also yields 0.84% - not the most generous dividend, but one that’s backed by a double-digit growth rate and 20 consecutive years of increases.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor had a position in: MSFT . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.