Microsoft price outlook as analysts predict positive FQ2 earnings

Microsoft Corporation (NASDAQ: MSFT) will announce second-quarter earnings results this Tuesday, January 25, after the market closes.

Bank of America has a positive view for the shares of Microsoft, while Wedbush Securities expects that Microsoft could beat revenue estimates by approximately 3%.

Outlook remains positive

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Microsoft will announce second fiscal quarter earnings tomorrow, and according to Wedbush Securities, the company could provide good results, which could have a positive impact on the broader tech sector as a whole.

Bank of America also has a positive view for the shares of Microsoft due to expectations for “sustained strength” across the company’s key business franchises.

Bank of America analyst Brad Sills highlighted Microsoft’s Azure cloud business as a particular area of growth, and he expects strong second-quarter earnings results from Microsoft. Bank of America continues to keep a buy rating on Microsoft shares with a $365 target price.

Dan Ives, an analyst from Wedbush Securities, believes that Microsoft likely saw a “robust performance” in the second fiscal quarter.

The concern that Microsoft could see some moderating growth in its cloud business is contrary to the view from Wedbush Securities. Dan Ives added:

Microsoft’s cloud expansion is not slowing down anytime soon, as “large transformational” cloud deals are north of 50%, and there is “clear momentum” in 2022 and the possibility it could take some market share away from Amazon’s Web Services.

Microsoft has a strong position in the market, and Wedbush Securities expects that Microsoft could beat revenue estimates by approximately 3%, with consensus estimates calling for $50.9 billion in revenue in $2.31 per share in earnings.

Dan Ives sees upside potential for shares of Microsoft, and he assigned a $375 price target, but probably it is not the best moment to buy shares of this company.

Investors remain concerned about the impacts of the pandemic, inflation, and supply-chain issues, and Wall Street’s main indexes had their biggest weekly drops since the pandemic’s beginning in March 2020.

The risk of further decline is still not over, and if the U.S. stock market enters a bigger correction phase, Microsoft shares could be at much lower levels.

Technical analysis

The critical support levels are $280 and $260; $320 and $340 represent the current resistance levels. If the price falls again below $280, it would be a strong “sell” signal, and the next target could be around $260.

On the other side, if the price jumps above $320 resistance, it would be a signal to trade Microsoft shares, and the next target could be around $340.

Summary

Microsoft will announce second fiscal quarter earnings tomorrow and Dan Ives, an analyst from Wedbush Securities, sees upside potential for shares of Microsoft. Bank of America also has a positive view for the shares of Microsoft and continues to keep a buy rating with a $365 target price.

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