Microsoft to Report Q2 Earnings Today: ETFs to Watch

Microsoft MSFT will release second-quarter fiscal 2025 results today after market close. It is worth taking a look at this leading software company’s fundamentals ahead of its results (read: DeepSeek Shakes US Tech Dominance: Impact on Stocks & ETFs).Microsoft stock has gained 3.3% over the past three months, underperforming its sector’s growth of 7.1%. ETFs having double-digit exposure to this software leader are currently in focus. These are T-Rex 2X Long Microsoft Daily Target ETF MSFX, iShares Dow Jones US Technology ETF IYW, iShares Top 20 U.S. Stocks ETF TOPT, Principal Focused Blue Chip ETF BCHP and MSCI Information Technology Index ETF FTEC.Image Source: Zacks Investment ResearchEarnings WhispersMicrosoft has an Earnings ESP of -2.13% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.This software maker has witnessed a negative earnings estimate revision of a penny over the past seven days for the second quarter of fiscal 2025. Microsoft’s earnings surprise history is good, as it delivered an earnings surprise of 4.91%, on average, in the last four quarters. The company is expected to post substantial earnings growth of 6.5% and revenue growth of 10.8% in the to-be-reported quarter (read: Mag 7 ETFs to Watch This Earnings Season). Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Microsoft Corporation Price, Consensus and EPS Surprise Microsoft Corporation price-consensus-eps-surprise-chart | Microsoft Corporation QuoteWall Street analysts have an average recommendation of 1.23 (made by 43 brokerage firms) on a scale of 1 to 5 (Strong Buy to Strong Sell), down from 1.24 a month ago. Of them, 36 are Strong Buy and four are Buy. Strong Buy and Buy, respectively, account for 83.72% and 9.3% of all recommendations. Based on short-term price targets offered by 40 analysts, the average price target for Microsoft is $510.03, ranging from a low of $425.00 to a high of $600.00. MSFT has a Growth Score of A, indicating that the software maker is primed for growth in the weeks ahead. At current levels, Microsoft's stock trades at 33.70X forward earnings, a premium to the Zacks Computer-Software industry average of 31.34X. What to WatchThe world's largest software company is one of the biggest beneficiaries of the AI boom thanks to its partnership with ChatGPT creator OpenAI and its investments in data centers and Copilot AI applications. It has been investing billions of dollars in expanding its global network of data centers and other physical infrastructure required to develop AI technology that can compose documents, make images and serve as a lifelike personal assistant at work or home. Microsoft plans to spend $80 billion in fiscal 2025 on constructing data centers designed for artificial intelligence workloads. Over half of this spending will be focused on the United States, according to a blog post by Brad Smith, Microsoft vice chair and president (read: Microsoft Unveils $80B AI Data Center Plans: ETFs in Focus). Though Azure growth will continue to slow down, Microsoft expects its AI business to be on track to bring in more than $10 billion in sales sometime in the coming quarters. Microsoft expects revenues of $68.1-$69.1 billion for the fiscal second quarter of 2025, implying 10.6% growth at the mid-point.ETFs With Exposure to MSFT Stock in FocusT-Rex 2X Long Microsoft Daily Target ETF (MSFX) T-Rex 2X Long Microsoft Daily Target ETF seeks to magnify (200%) the daily performance of Microsoft stock. It charges 1.05% in annual fees and has accumulated $8.3 million in its asset base. iShares U.S. Technology ETF (IYW)iShares U.S. Technology ETF provides exposure to U.S. electronics, computer software and hardware, and informational technology companies. It tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, holding 140 securities in its basket. Of these, Microsoft occupies the second position in the basket, with 15.1% of the assets. iShares Dow Jones US Technology ETF has AUM of $20.8 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges nearly 613,000 shares a day. IYW has a Zacks ETF Rank #1 with a Medium risk outlook. iShares Top 20 U.S. Stocks ETF (TOPT)iShares Top 20 U.S. Stocks ETF offers exposure to the potential growth of mega-cap stocks, which may benefit from their scale and resources. It tracks the S&P 500 Top 20 Select Index and holds 21 stocks in its basket, with MSFT taking the second spot at 13.6%. iShares Top 20 U.S. Stocks ETF has amassed $145.3 million in its asset base within three months of its inception and charges 20 bps in annual fees. It trades in an average daily volume of 246,000 shares (read: Go Beyond MAGS ETF: Tap Broadening of the Rally With TOPT ETF).Principal Focused Blue Chip ETF (BCHP)Principal Focused Blue Chip ETF is an actively managed fund offering exposure to blue-chip companies, which are well established in their industries and have the potential for capital growth and an expectation for above-average earnings. It holds 24 stocks, with Microsoft occupying the third position at 12.6%. Principal Focused Blue Chip ETF has AUM of $95.7 million and trades in a good volume of 9,000 shares a day, on average. It has an expense ratio of 0.58% and a Zacks ETF Rank #3. MSCI Information Technology Index ETF (FTEC)MSCI Information Technology Index ETF is home to 296 technology stocks with AUM of $13.8 billion. It follows the MSCI USA IMI Information Technology Index. Microsoft is the third firm with a 13% allocation. MSCI Information Technology Index ETF has 0.08% in expense ratio, while volume is solid at 279,000 shares a day. It carries a Zacks ETF Rank #1 with a Medium risk outlook.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports iShares U.S. Technology ETF (IYW): ETF Research Reports iShares Top 20 U.S. Stocks ETF (TOPT): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks