How Will Microsoft Stock React To Its Upcoming Earnings?
Microsoft (NASDAQ:MSFT) is set to report its earnings on Wednesday, April 29, 2026. The company has $3.2 Tril in current market capitalization. Revenue over the last twelve months was $305 Bil, and it was operationally profitable with $143 Bil in operating profits and net income of $119 Bil. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader.
There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released.
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Microsoft’s Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded over the last five years, with 9 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 47% of the time.
- However, this percentage decreases to 36% if we consider data for the last 3 years instead of 5.
- Median of the 9 positive returns = 4.2%, and median of the 10 negative returns = -3.3%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D | 5D | 21D |
| 1/28/2026 | -10.0% | -14.0% | -18.3% |
| 10/29/2025 | -2.9% | -6.4% | -10.0% |
| 7/30/2025 | 3.9% | 2.3% | -0.5% |
| 4/30/2025 | 7.6% | 9.6% | 16.7% |
| 1/29/2025 | -6.2% | -6.6% | -10.1% |
| 10/30/2024 | -6.1% | -2.9% | -1.9% |
| 7/30/2024 | -1.1% | -5.5% | -2.7% |
| 4/25/2024 | 1.8% | -0.3% | 8.0% |
| 1/30/2024 | -2.7% | -0.8% | 1.4% |
| 10/24/2023 | 3.1% | 2.3% | 14.5% |
| 7/25/2023 | -3.8% | -4.2% | -6.6% |
| 4/25/2023 | 7.2% | 10.9% | 14.2% |
| 1/24/2023 | -0.6% | 2.4% | 5.5% |
| 10/25/2022 | -7.7% | -9.0% | -1.0% |
| 7/26/2022 | 6.7% | 9.1% | 9.7% |
| 4/26/2022 | 4.8% | 4.3% | -2.6% |
| 1/25/2022 | 2.8% | 7.0% | 2.3% |
| 10/26/2021 | 4.2% | 7.4% | 9.2% |
| 7/27/2021 | -0.1% | 0.2% | 5.6% |
| SUMMARY STATS | |||
| # Positive | 9 | 10 | 10 |
| # Negative | 10 | 9 | 9 |
| Median Positive | 4.2% | 5.7% | 8.6% |
| Median Negative | -3.3% | -5.5% | -2.7% |
| Max Positive | 7.6% | 10.9% | 16.7% |
| Max Negative | -10.0% | -14.0% | -18.3% |
Correlation Between 1D, 5D and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
| History | 1D_5D | 1D_21D | 5D_21D |
|---|---|---|---|
| 5Y History | 57.5% | 37.9% | 5.7% |
| 3Y History | 37.8% | 56.9% | 52.9% |
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