Microsoft (MSFT) Earnings Preview – Will Q1 numbers confirm MSFT's price recovery?

• Microsoft lost over 30% of its value since reaching its all-time highs in July 2025, but recovering heavily since its March trough
• Investors will want to confirm the price rebound with strong forward communications and profits
• High spending projections for AI infrastructure saw tough responses, so Markets are waiting to see if better tech narratives could turn sentiment around

Microsoft continues to dominate a tech industry that is slowly bouncing from Fearful trading territory, as can be seen with Nasdaq exploding back to its all-time highs – AI themes are trending again, with fears of other sectors being affected by higher Energy prices.

Its fundamental strength is still anchored by a commanding market share in Enterprise Software (Office 365) and a robust #2 position in Cloud (Azure), which recently saw a stellar 39% year-over-year revenue growth.

Despite recent selloffs in the MSFT stock, earnings growth remains impressive; in its most recent reported quarter (Q4 2025), Microsoft delivered a 24% increase in adjusted EPS ($4.14$), significantly beating analyst estimates.

What scared investors was the immense spending projections for AI infrastructures, which hit at a time when Market sentiment took a turn to the downside.

Indeed, recent bearish earnings reactions have been a mix of pessimism over AI monetization—specifically with 15 million paid Copilot seats—and caution regarding massive capital expenditures on GPUs at a time when costs are exploding.

Microsoft is Open AI's primary cloud partner and they just announced a restructuing in the way they operate – Reactions have been more optimistic than pessimistic, but the real response will be seen tomorrow. You can read more about it right here.

Overall, Microsoft remains a Cash Cow, returning over $12 billion to shareholders last quarter through buybacks and dividends, so it remains a relatively attractive investment on large drops.

Keep in mind that general appetite for Tech and AI remain the primary driver of Mag 7 attraction.

Bubble fears persist, but it still seems that the top is not quite there yet – and compared to 2000, profit-numbers are more than real: they are record-breaking!

Microsoft has bounced about 20% from its 2025 Support, so expectations are high.

According to Bloomberg, the EPS estimate is at $4.04 to $81.46 Billions – So traders will want to see both a beat on these estimates and more realistic spending projections.

Microsoft technical levels for trading:

Resistance Levels

• $430 to $445 April Resistance
• $460 to $475 Pivotal Resistance
• $485 to $500 December Highs
• $540 to $550 ATH Double Top

Support Levels

• $410 to $420 Momentum Pivot
• $380 to $395 Key February Support
• $340 to $350 2025 and 2026 Support
• $310 to $320 September 2023 Support

• A break above the $445 Resistance should see a fast extension towards the 200-Day MA ($469) – The next step is $500.
• Below $410 however, a retest of the 50-Day MA ($395) could materialize quickly.

Safe Trades!

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