What to Expect From Microsoft Stock Ahead of Its Earnings

All eyes are on Microsoft (NASDAQ:MSFT) as it gears up to unveil its earnings on Wednesday, April 30, 2025. With a history of surprising post-earnings moves and not always in a good way traders are bracing for potential turbulence. Over the past five years, MSFT has slipped more often than soared, logging a negative one-day return 55% of the time. On average, the drop has been around -3.8%, with the steepest fall hitting -7.7%.

For this quarter, analysts are expecting the following compared to last year:

While revenue is growing, profit margins may tighten slightly. Most of the strength is expected from Microsoft 365 products and the Intelligent Cloud division, with Azure continuing as a major growth driver.

If you like trading around big events, there are two approaches often considered: position yourself before the earnings release based on past patterns, or wait for the earnings reaction and trade based on the move. Those who prefer not to deal with the swings of individual stocks might explore Trefis’s High Quality portfolio, which has outpaced the S&P 500 and delivered returns above 91% since launch.

How Has MSFT Usually Moved After Earnings?

When MSFT closed higher after earnings, the typical gain was about 3.1%. On down days, the median loss was about -3.8%. Historical data also covers how the stock performed over the five-day (5D) and twenty-one-day (21D) periods following earnings.

Short-Term vs. Medium-Term Moves

When analyzing MSFT’s stock behavior around earnings, it’s helpful to separate short-term and medium-term moves:

• Short-Term Move (1 Day):
  Focuses on the stock’s immediate reaction right after earnings. Analysts look at the one-day return (1D) to see if the initial move is positive or negative. A sharp rise or fall on day one often reflects market sentiment about the earnings report.
  
• Medium-Term Move (5 Days and 21 Days):
  Studies the stock’s performance over the following five days (5D) and twenty-one days (21D) after earnings. If the stock moves strongly on day one, it sometimes sets the tone for the next few days or even weeks.
  

Historical data suggests there is a measurable correlation between the one-day move and the five-day or twenty-one-day performance. Traders often use this information to decide whether to hold positions beyond the first trading session after earnings.

Do Peer Stocks Influence Microsoft’s Reaction?

Sometimes, Microsoft’s stock responds not just to its own earnings but also to how major tech peers perform. A strong or weak report from a key rival can cause movement in MSFT stock even before its own earnings are announced. Past data highlights the connection between Microsoft’s post-earnings moves and the performance of other tech giants just before.

Looking for More Stable Growth?

Investors seeking consistent returns with less volatility may consider Trefis’s High Quality portfolio. It has consistently beaten its benchmark, combining the S&P 500, S&P Midcap, and Russell 2000, and achieved over 91% total returns.