Microsoft Targets $4.06 EPS on $81.4B Revenue as Azure Taps OpenAI

*TL;DR: Microsoft forecasts $4.06 earnings per share on $81.4 billion revenue, while 45% of Azure backlog comes from OpenAI and Copilot seats hit 15 million.

Context Microsoft (MSFT) will release its fiscal Q3 2026 results after market close, joining the Magnificent Seven earnings round. The stock has rebounded from a 23% drop in the prior quarter to a 10% decline year‑to‑date, reflecting easing geopolitical tensions and renewed investor optimism.

Key Facts - Analysts project earnings per share of $4.06 on revenue of $81.4 billion for the quarter. - Azure, Microsoft’s cloud platform, reports that 45% of its backlog—future contract value—originates from OpenAI, the creator of ChatGPT. - The company now counts 15 million paid seats for Copilot, its AI‑powered digital assistant, out of a potential 450 million Microsoft 365 customers. - Azure’s prior quarter showed 38% growth on a constant‑currency basis, and management has guided for similar expansion this quarter.

What It Means The earnings outlook signals steady top‑line momentum despite a challenging year. Azure’s reliance on OpenAI underscores Microsoft’s strategy to monetize AI through cloud services, even as OpenAI faces its own revenue pressures. The revised partnership allows OpenAI to run workloads on other clouds, but Microsoft retains primary cloud status and revenue‑share rights through 2030, preserving a long‑term cash flow stream.

Copilot’s 15 million paid seats represent modest penetration—about 3% of the total Microsoft 365 base—but indicate growing enterprise adoption of AI assistants. If growth accelerates, Copilot could become a significant upsell channel, complementing Azure’s AI compute demand.

Investors will watch the earnings call for guidance on Azure’s near‑term compute demand, any shift in OpenAI’s contribution to the backlog, and updates on Copilot’s roadmap. Strong results could revive momentum for a stock that has underperformed its peers.

Looking ahead, the market will focus on whether Microsoft can sustain Azure’s high growth rate, deepen AI integration across its product suite, and translate Copilot usage into broader revenue growth.