"Microsoft posted Q2 FY2026 EPS of $4.14 against a $3.8486 estimate, an 8% beat on revenue of $81.27 billion. The market response was brutal: a -10% day-of decline, then -9% over the next week."
"Across the last five quarters, Microsoft has beaten EPS five out of five times, yet the average one-week reaction is -4%. Even Q1 FY2026's 13% EPS surprise produced a -3% day-of move."
"The April quarter, reported April 29, gave bulls something to work with. Revenue hit $81.3 billion, Azure demand 'continues to exceed available supply,' and Microsoft 365 Copilot seat additions rose over 160% year-over-year to 15 million paid seats."
Microsoft's January earnings report showed a significant EPS beat, but the stock reacted negatively, declining 10% on the day. High capital expenditures raised concerns about returns on investment. Despite beating EPS expectations consistently, the stock has underperformed, with an average one-week reaction of -4%. The April quarter showed improved revenue and Azure demand, but skepticism remains due to ongoing capital intensity issues and stock performance, with MSFT down 14% year-to-date.
Read at 24/7 Wall St.
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