Microsoft Must Say This on Oct. 28 or the Stock Will Go Into Free Fall
Microsoft has been losing ground in the cloud computing sector.
Microsoft's upcoming earnings report on October 28 is a crucial event for investors, as the company's stock performance has been mixed throughout the year. Microsoft's stock price experienced a significant decline in early 2026 but has since rebounded, achieving a 10% increase for the year—still trailing behind the S&P 500's nearly 13% gain. The primary driver behind Microsoft's growth is its AI strategy, consisting of Copilot, Azure, and its partnership with OpenAI.
Microsoft's AI initiatives have shown promise, with Copilot reaching 30 million paid seats in Q4 fiscal 2026. However, Azure, its cloud computing platform, is the key to Microsoft's future growth potential. Azure has experienced consistent growth, with a 43% increase in Q4, outpacing other AI endeavors. Nevertheless, concerns arise as Azure's growth isn't accelerating compared to its competitors, Amazon Web Services and Alphabet's Google Cloud, who have seen their cloud computing growth rates accelerate rapidly.
If Azure can maintain its 40% growth rate or surpass its competitors, Microsoft's stock could experience a rally. However, if the upcoming reports from Alphabet and Amazon show that these companies are growing at a faster pace than Azure, Microsoft's stock may face a decline. For now, the author advises caution and refrains from adding any shares of Microsoft to their portfolio.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.