Microsoft's Next Earnings Report on July 29 Could Send the Stock Soaring. Here's Why.

It's been a pugnacious twelvemonth for Microsoft (NASDAQ:MSFT) shareholders. The stock, typically viewed arsenic 1 of the safest plays successful the full banal market, has mislaid astir a 5th of its value.

Concerns astir elevated superior expenditures connected artificial quality infrastructure and a bundle armageddon person extracted their lb of flesh.

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Microsoft volition person the accidental to beryllium the naysayers incorrect erstwhile it reports its 2026 fiscal fourth-quarter net aft the marketplace closes connected Wednesday, July 29.

Following the results, CEO Satya Nadella and the remainder of Microsoft's elder absorption volition big a unrecorded league telephone with Wall Street analysts to sermon the results.

The net study could nonstop the banal soaring. Here's why.

Image source: Motley Fool.

The accidental to beryllium the company's AI strategy is moving

Microsoft's banal has sold disconnected for a fewer reasons.

The institution has guided for $190 cardinal successful superior expenditures successful calendar twelvemonth 2026,  mostly for AI infrastructure.

Investors are besides acrophobic that the company's AI integer adjunct Copilot is not gaining traction and that Microsoft 365, its suite of bureau tools that powers the concern world, could yet beryllium susceptible to AI-made alternatives.

All the concerns are valid, of course. Copilot had astir 20 cardinal paid endeavor seats connected Microsoft's past net call, contempt the company's 450 million-plus Microsoft 365 subscribers.

Morgan Stanley expert Adam Wood thinks Microsoft has a bully accidental connected the upcoming net merchandise to beryllium that its AI strategy is making progress.

Wood expects Azure, Microsoft's unreality concern benefitting from AI, to amusement accelerated maturation implicit the adjacent fewer quarters and for Copilot adoption to prime up steam arsenic well.

Wood sees tremendous upside for Microsoft, peculiarly if Azure maturation and Copilot adoption thrust maturation successful Microsoft 365. Wood has a $795 terms people arsenic his bull case, which would connote much than a treble from existent levels.

Long-term investors tin bargain the banal

I bash deliberation semipermanent investors tin bargain the stock. While Microsoft could soar pursuing its upcoming net results, investors should inactive beryllium cautious astir trading astir a near-term net event.

Other ample AI companies that person reported precocious capex guidance person experienced important sell-offs, and this poses a imaginable hazard for Microsoft. The institution could usher for higher-than-expected capex adjacent 4th oregon successful the calendar year.