Overview
- Microsoft is set to report fiscal Q2 results after the market close on January 28, with investor attention on Azure growth, remaining performance obligations, cloud margins, and capital spending guidance.
- In the prior quarter, Azure and other cloud services grew about 40% year over year and commercial RPO rose over 50% to nearly $400 billion, signaling strong contracted demand for AI-ready capacity.
- CFO Amy Hood said demand is exceeding supply and guided roughly 37% Azure growth in constant currency for Q2, adding that capacity constraints are likely to persist through the fiscal year.
- Analysts have mostly maintained Buy or Outperform ratings while trimming price targets, including UBS to $600, citing broader software multiple compression rather than Microsoft-specific deterioration.
- Options pricing implies about a 5.4% move after the report, and a Federal Reserve policy decision this week could further amplify volatility across Big Tech.