Microsoft Gears Up For Q2 Earnings: Will The Bullish Trend Hold?

Microsoft Corp MSFT heads into its second-quarter earnings report on Wednesday with bullish technical indicators but mixed sentiment from partners.

The tech company’s stock is up 6.06% over the past year and 3.82% year to date, with a share price of $434.56.

Chart created using Benzinga Pro

However, the short-term moving averages flash conflicting signals. While the eight-day simple moving average (SMA) ($434.99) suggests a slight pullback, the 20-day ($428.17), 50-day ($430.77), and 200-day ($425.56) SMAs all paint a bullish picture.

The moving average convergence/divergence (MACD) at 1.97 reinforces this upward momentum, while the relative strength index (RSI) of 52.43 suggests there’s room to climb without entering overbought territory.

Overall, buying pressure remains intact, positioning Microsoft for potential gains—if earnings don't spoil the party.

Read Also: Microsoft’s AI Revenue Set To Surpass $10 Billion: Piper Sandler Maintains Overweight Rating

The Q2 Earnings Setup: Cautious Optimism?

Wall Street expects Microsoft to post earnings per share of $3.12 on revenue of $68.6 billion, according to Benzinga Pro data.

JPMorgan's Mark R. Murphy notes that Microsoft's second-quarter survey shows that its partners finished 3% above plan—an improvement from last quarter, but not quite as strong as last year. While business momentum is positive, Azure growth expectations remain lukewarm, with partners expecting 30%-31% growth in the coming quarters—slightly below consensus.

The bigger wildcard? AI.

M365 Copilot adoption is expected to rise over the next five years, but pricing concerns could slow near-term traction. Meanwhile, hyperscaler rivals are ramping up AI and cloud investments, adding competitive pressure. There's also the looming FX headwind (~1.5% hit to CY25) and lingering concerns over Microsoft's December Cruise charge.

The Verdict: Bullish, But With A Caveat

Technically, Microsoft stock has the makings of a continued bullish run, with strong moving averages and MACD backing the trend.

However, partner sentiment on Azure and AI growth could introduce near-term volatility.

If earnings impress, Microsoft could solidify its momentum; if guidance disappoints, investors may have to navigate some turbulence before the long-term AI narrative takes hold.

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