Microsoft (MSFT) is set to report fiscal second-quarter earnings after the market closes Wednesday, with analysts largely bullish ahead of the results.

“Investor sentiment has shifted negative as a ‘wall of worry' around gross margins, capex, GenAI monetization and the OpenAI relationship builds,” Morgan Stanley analysts said recently, noting that Microsoft has underperformed other large cap software companies over the past three months.

The firm lowered its price target to $540 from $548 but said Microsoft’s position in 澳洲幸运5官方开奖结果体彩网:generative artificial intelligence and recentಌ market trends could create “an attractive entry point.”

The analysts added earlier this week that advances by 澳洲幸运5官方开奖结果体彩网:Chinese AI startup DeepSeek, which sent a slew of AI stocks tumbling Monday on concerns about the competitiveness of U.S. firms, 澳洲幸运5官方开奖结果体彩网:could be a "positive" for M൲icrosoft, noting its Azure platform stands to benefit from a proliferation of AI models and coღnsumer app༒lications.

Overall, 18 of 19 analysts tracked by Visible Alpha have a “buy” or equivalent rating, compared to 1 “hold” rating. Their consensus price target is just over $517, a nearly 17% premium to Wednesday's intraday price around $442.

Wall Street expects Microsoft to report revenue of $68.89 billion, up 11% year-over-year; and earnings of $23.26 billion, or $3.12 per share, up from $21.87 billion, or $2.93 per share a year earlier. Revenue from Microsoft's Intelligent Cloud segment, which includes its Azure cloud computing platform, is expected to climb 20% to $25.76 billion. 

Shares of Microsoft have gained about 5% since the start of the year and 11% in the last 12 months.

UPDATE—Jan. 29, 2025: This article has been updated to reflect more recent analyst estimates and share price values.