3 Major Reasons to Buy Microsoft Before July 29 Q4 Earnings

Microsoft (NASDAQ:MSFT) reports fiscal Q4 2026 net connected July 29, with its banal down 24.69% implicit the past year, contempt accelerating request crossed Azure and artificial intelligence.

Azure grew 40% past quarter, Microsoft's AI concern reached a $37 cardinal yearly gross tally rate, and commercialized remaining show obligations astir doubled to $627 billion. Yet shares present commercialized astatine $381.70 and astir 20 times guardant earnings.

Three Reasons to Buy Microsoft Ahead of Earnings

First, valuation. MSFT trades astatine a guardant P/E of 20 with a PEG ratio of 1.18, good beneath wherever this concern has traded for astir of the AI cycle. The stock's 52-week precocious of $551.05 sits acold supra today's terms of $381.70, and the statement expert people of $556.75 is backed by 54 bargain ratings against zero sells.

Second, income and superior return. Microsoft pays a $3.56 yearly dividend and returned $12.7 cardinal to shareholders successful Q2 FY26, up 32% twelvemonth implicit year. A debt-to-equity ratio of 0.18 and involvement sum of 53.89x shows Microsoft has a fortress equilibrium sheet. The concern besides has an fantabulous 33.28% instrumentality connected equity.

Third, the growth engine. Azure grew 40% past quarter, the AI concern deed a $37 cardinal yearly tally rate, up 123% twelvemonth implicit year, and commercialized remaining show obligations reached $627 billion, astir doubling twelvemonth implicit year.

Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Microsoft didn't marque the cut. Grab the names FREE today.

Can a $627 Billion Backlog Justify Microsoft's AI Spending?

The carnivore lawsuit for Microsoft (and hyperscalers astatine large) is superior intensity. Microsoft spent $30.88 billion on capex past quarter, up 84.39% twelvemonth implicit year, and skeptics question the return. The $627 cardinal RPO shows committedness from this spending. Customers person already signed the checks that wage for the buildout, with astir 25% recognized arsenic gross successful the adjacent 12 months, up 39% twelvemonth implicit year.