Microsoft's First-Quarter Results to Match Views Amid Azure's Momentum, Morgan Stanley Says

03:43 PM EDT, 10/19/2026 (MT Newswires) -- Microsoft's (MSFT) fiscal first-quarter results will likely meet Wall Street's expectations, driven by sustained momentum in its Azure cloud computing platform, Morgan Stanley said Monday. Morgan Stanley projects earnings of $4.73 per share for Microsoft, matching the consensus and surging from $3.72 a year earlier. The brokerage expects revenue of $90.24 billion, compared with the Street's estimate of a nearly 17% growth to $90.64 billion. The technology giant is scheduled to release its quarterly results on Oct. 28. The buyside expects 47% revenue growth for Azure in constant currency terms, which Morgan Stanley said exceeds management's 44% to 45% guidance. This estimate, coupled with a second-quarter outlook indicating at least steady year-over-year growth versus the first quarter performance, should underpin the stock price, according to the research note. "The narrative around Microsoft has materially improved following last quarter's better results and initial (fiscal 2027) guidance pointing to durable strength across the company's core growth businesses," Morgan Stanley said. "On Azure, demand remains robust across both core cloud and (artificial intelligence) workloads." Microsoft said in July that fiscal fourth-quarter intelligent cloud revenue soared 32% year over year, buoyed by a 43% jump in Azure and other services. Amazon.com (AMZN) and Alphabet (GOOG, GOOGL) also reported sharp cloud gains for the second quarter, with sales at the Amazon Web Services marking the fastest rate in 18 quarters. The Google cloud segment soared 82%. The brokerage said that Microsoft continued to be the biggest winner from heavy spending on AI-related products and services. "Importantly, we see greater data center capacity availability providing an additional tailwind to Azure growth, with our latest capacity tracker estimating that Microsoft brought (about 3.25 gigawatt) of incremental capacity online in (fiscal 2026), while we expect another (roughly) 4.25 GW to come online in (fiscal 2027)," the firm said. Morgan Stanley also sees strong gains from Microsoft 365, the company's subscription-based service, helping it sustain the momentum into the first quarter. "Within M365, our latest partner checks point to continued strength in E3-to-E5 upgrades, with security remaining a key driver, while early E7 adoption provides another lever for potential (average revenue per user) upside, and Copilot adoption continues to improve, although consumption-based Copilot usage remains early days," the firm said. Microsoft's shares were up 1.1% in late afternoon trade, taking the stock's year-to-date gains to nearly 11%. Price: 534.41, Change: +5.36, Percent Change: +1.01