FQ1 2026 Earnings Expectations:
FQ126 performance is expected to exceed market consensus;
Projected total revenue is $75.4 billion, with EPS of $3.65, slightly above the market consensus of $75.3 billion in revenue;
Azure growth is anticipated to reach the high end of the 30% range, potentially sustaining the current high growth trend until FY28;
Microsoft's FY26 capital expenditure forecast has been raised to approximately $127 billion, with FQ2 capital expenditure expected to reach $33 billion.
How to Evaluate Microsoft's Earnings Expectations:
Earnings expectations are highly optimistic;
The market may be underestimating Microsoft's commitment and investment in AI infrastructure;
Expected earnings volatility is ±4.7%, with a fluctuation range of $498 to $547.
Trading Strategy:
Strong business performance, no major negative catalysts, making it difficult for the stock price to fall below the range. Consider selling put options.
Sell put options before earnings and close the position at market open on the day earnings are released.
If holding the underlying stock, sell out-of-the-money call options to generate additional income.
Suggested Strike Price and Expiration Date Reference:
Covered Call Strategy: $MSFT 20251031 555.0 CALL$ (Win Rate: 85%)
Sell Put Strategy: $MSFT 20251031 495.0 PUT$ (Win Rate: 83%)
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