Citi: Microsoft's Q3 AI-related revenue is expected to exceed expectations
Microsoft is set to announce its financial performance for the third quarter of the 2024 fiscal year later this month. Citigroup indicates that recent surveys suggest that Microsoft's revenue related to artificial intelligence may rise unexpectedly. In a research report, Citigroup stated that AI services are driving the growth trend of Microsoft's cloud business Azure, while there is "strong interest" in the company's various Copilot products. Furthermore, a more optimistic personal computer market, coupled with conservative guidance, may boost several key metrics for Microsoft (including Azure), leading to an increase in the company's earnings per share. However, considering some unfavorable foreign exchange factors, Citigroup has slightly lowered Microsoft's target price from $480 to $475. The bank also noted that general expectations for Microsoft's fourth-quarter performance seem relatively low, and will closely monitor any comments from the company regarding concerns about capital expenditures and gross margins for the 2025 fiscal year. Currently, analysts generally expect Microsoft's third-quarter revenue to be $60.85 billion, with earnings per share of $2.85
According to the information from the Zhitong Finance and Economics APP, Microsoft (MSFT.US) is expected to announce its financial performance for the third quarter of the 2024 fiscal year later this month. Citigroup stated that recent surveys indicate that Microsoft's revenue related to artificial intelligence may unexpectedly rise. In a research report, Citigroup mentioned that AI services have been driving the growth trend of Microsoft's cloud business Azure, and there is a "strong interest" in the company's various Copilot products. Additionally, a more optimistic personal computer market, along with conservative guidance, could boost several key indicators for Microsoft (including Azure), leading to an increase in the company's earnings per share.
However, considering some unfavorable foreign exchange factors, Citigroup has slightly lowered Microsoft's target price from $480 to $475. The bank also noted that general expectations for Microsoft's fourth-quarter performance seem relatively low, and they will closely monitor any comments from the company regarding concerns about capital expenditure and gross margin for the 2025 fiscal year.
Currently, analysts generally expect Microsoft's third-quarter revenue to be $60.85 billion, with earnings per share of $2.85