--- title: "msft" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/42934449.md" description: "Microsoft's latest earnings report may keep short sellers awake all night. Morgan Stanley released a forward-looking analysis for Microsoft's Q4 2026 earnings, taking an extremely firm stance with one core message: market concerns about Azure are unfounded. First, let's talk about Azure. The market worries that growth is peaking, but Morgan Stanley slammed the table directly: it expects Azure's constant-currency growth in Q4 to reach 41%, exceeding the company's own guidance upper limit of 39-40%. How did we get there? Core Azure stabilized at 26%, plus AI contributed 19 percentage points. The key is that the "capacity constraints" that were previously holding things back are now easing..." datetime: "2026-07-25T03:00:36.000Z" locales: - [en](https://longbridge.com/en/topics/42934449.md) - [zh-CN](https://longbridge.com/zh-CN/topics/42934449.md) - [zh-HK](https://longbridge.com/zh-HK/topics/42934449.md) author: "[Optimus](https://longbridge.com/en/profiles/20639361.md)" --- # msft Microsoft's latest earnings report might keep short sellers awake all night. Morgan Stanley released a forward-looking analysis for Microsoft's Q4 2026 earnings, taking an extremely firm stance. The core message is simple: market concerns about Azure are unfounded. Let's talk about Azure first. The market worries that growth has peaked, but Morgan Stanley slammed the table on this: they expect Azure's constant-currency growth in Q4 to reach 41%, exceeding the company's own guidance upper bound of 39-40%. How? Core Azure stabilizes at 26%, plus an additional 19 percentage points contributed by AI. Crucially, the "capacity constraints" that have been bottlenecks are easing, and investments in AI infrastructure are starting to translate into tangible revenue, not just burning cash with no results. Next, Copilot. The business model is evolving—it's no longer purely SaaS subscription, but a hybrid of "base seat fees + consumption-based billing." Three growth engines are turning simultaneously: seat counts continue to rise (expected to exceed 20 million), customers are upgrading to higher-priced E7 versions, and consumption-based billing driven by Agents is increasing. Coupled with the comprehensive M365 price hike implemented on July 1st, Morgan Stanley calculates that ARPU will increase by $12 over the next three years. This isn't a one-time revenue pulse; it's a sustained structural improvement. What about the capital expenditures that worry the market most? Wall Street is still debating whether Capex will spiral out of control, but Morgan Stanley says there's no need to panic. Two-thirds of the spending goes into short-term assets like GPUs/CPUs, directly tied to revenue in the coming quarters, rather than being those far-off long-term pie-in-the-sky promises. Morgan Stanley built its own model, concluding that as long as gross margins remain above 20%, the potential for AI revenue far exceeds Wall Street's current conservative forecasts. And valuation? The current stock price corresponds to roughly a 16x PE based on FY28 GAAP EPS. For a company with a 16x PE and growth exceeding 20%, Morgan Stanley says it is significantly undervalued, with a target price of $600, implying a 50% upside. Regarding earnings guidance, the operating margin guidance for FY27 is expected to "slightly decrease or drop by 1%," but in actual execution, expansion is highly likely—management's habitual tactic of "starting low and ending high." To summarize Morgan Stanley's logic chain: Azure beats expectations → Copilot commercialization accelerates → Capex efficiency validated → Margin resilience exceeds expectations → Valuation repair ### Related Stocks - [COP.US](https://longbridge.com/en/quote/COP.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [002245.CN](https://longbridge.com/en/quote/002245.CN.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Comments (6) - **投资小达人 · 2026-07-27T06:42:59.000Z**: For real? Will the good news be fully priced in these days? Should I add some positions first? I heard changing a SIM card might help? - **坐等个股起飞** (2026-07-27T06:43:41.000Z): Yeah, get a 🇭🇰📱 SIM card, enable roaming, and you can use it at home connected to WiFi - **旁路 · 2026-07-26T04:05:14.000Z**: If the earnings report doesn't drop significantly, that's already considered good. Even TSMC's earnings report is down. Basically, a good earnings report means a slight drop, while a poor one means a sharp decline—there are no exceptions. The US stock market is currently in this kind of condition; i - **Double l · 2026-07-25T08:33:28.000Z**: This trash stock still hoping earnings can pull it up? - **旁路** (2026-07-26T04:05:44.000Z): Scroll down - **空头给我爆！ · 2026-07-25T07:28:18.000Z**: 😂I can't imagine what kind of earnings report would be good enough to pump it up 😭