Microsoft (MSFT) will release its quarterly earnings report later today. The company beat analysts’ expectations in its last quarter and many anticipate a similar pattern this time around. Let’s discuss what to expect and if stock prices will rally after the earnings data is released.

Will Microsoft Stock Price Rally After Earnings Report Data?

According to analysts, Microsoft’s revenue may grow 14.7% year on year this quarter. The figures represents a dip from the 18.1% increase it recorded in the same quarter last year.

While many expect Microsoft to report high revenue, the company’s stock price has fallen by nearly 18% year-to-date. Nonetheless, Deepwater Asset Management managing partner Gene Munster said that earnings do not matter. Munster stated that “shares could be up 7% (the implied volatility) but that misses the bigger point.“

According to Munster, Microsoft has two major headwinds in the next five years. While Munster expect Azure to continue performing well, he states that the company’s “core business needs a new pricing model.“

The second headwind according to Munster is bots. He believes that users will increasingly complete tasks on Word or Excel using AI bots. He states, “Even if Microsoft has impressive results the bot boogeyman will not go away. The reason is the utility of software is based on the abstraction layer (the ability of humans to interface with the machine). Agents and bots remove the need for the abstraction layer because they just need bot-talk.“

Also Read: Nvidia Stock Falls Below $200 Again, Bernstein Gives Buy Rating (NVDA)

Some Wall Street analysts have become quite bearish on Microsoft (MSFT). Scotiabank’s Patrick Colville decreased MSFT’s price target from $550 to $470. UBS decreased their target from $510 to $480, while Morgan Stanley dropped their target from $650 to $600. The pattern suggests that analyst are not very certain on MSFT’s performance. However, one should note that Microsoft has a history of beating analysts’ expectations.