Earnings Preview | Microsoft's Q4 profits are expected to double year-on-year, with Azure likely to continue performing well

According to Zhitong Finance APP, Microsoft (MSFT.US), one of the biggest winners in the recent artificial intelligence (AI) boom, will announce its fiscal year 2025 fourth-quarter results after the market closes on July 30, Eastern Time. Wall Street generally expects Microsoft's Q4 revenue to grow by 13.88% year-on-year to $73.71 billion, and earnings per share to increase by 13.56% year-on-year to $3.35.

Thanks to ongoing investments in AI infrastructure and strong demand for cloud computing, Microsoft's upcoming fourth-quarter results are expected to continue showing strong growth momentum in its core business areas. By segment, the productivity and business processes division is expected to see revenue growth of 12.2% year-on-year to $32.1 billion. Microsoft 365 commercial cloud is expected to continue its strong growth, with management anticipating an increase of about 14% (at constant exchange rates); this division has also driven growth in ARPU (average revenue per user) through the adoption of the E5 version and Microsoft 365 Copilot; LinkedIn is expected to maintain stable performance despite a weak recruitment market, with revenue expected to achieve high single-digit growth; Microsoft has also strengthened its competitive position with major announcements at the Build 2025 developer conference, including new AI agent capabilities and enterprise-level AI tuning features.

The intelligent cloud division remains Microsoft's main growth engine, with revenue expected to grow by 21.5% year-on-year to $28.89 billion. Among them, Azure is expected to perform particularly well, with growth projected at 34% to 35% at constant exchange rates. In the previous quarter, Microsoft proactively increased AI computing resources to meet the rising demand from customers, despite ongoing supply constraints. Microsoft has planned $80 billion in capital expenditures for fiscal year 2025, primarily for new data centers globally, with most investments concentrated in the United States.

At the Build 2025 developer conference, Microsoft showcased its comprehensive AI platform strategy, including multi-agent system orchestration, enterprise-level security features, and the expansion of model ecosystem collaborations. These initiatives further solidify Microsoft's leading position in enterprise AI adoption and lay a solid foundation for fiscal year 2026.

Revenue from personal computing is expected to grow by 1% year-on-year to $12.43 billion. Although the consumer-facing segment has shown relatively moderate performance, it still demonstrates some resilience, benefiting from the deployment of new features such as Recall, Click to Do, and upgraded Windows search on Copilot+ PCs. Windows revenue performance will be influenced by improving PC demand trends. According to IDC's preliminary data, global PC shipments in the second quarter of 2025 reached 68.4 million units, a year-on-year increase of 6.5%, although Microsoft still expects Windows OEM revenue to decline in the mid to high single digits.

Additionally, the enterprise services division is expected to achieve mid to high single-digit revenue growth, while revenue from server products is expected to see a mid-single-digit decline. The gaming business is expected to achieve mid-single-digit revenue growth, with Xbox content and services revenue growing in the high single digits. The moderate performance of consumer-related businesses contrasts with the strength of enterprise and cloud businesses Microsoft's leading advantage in the AI field and its dominant position in cloud business reflect its sustainable competitive advantage. Despite high valuations and intensified competition, Microsoft's $80 billion global data center investment plan, successful integration of AI technology into office software, and the strong growth momentum of its intelligent cloud business all reinforce its market leadership and are expected to create long-term value for shareholders