MSFT

We have a third of S&P 500 members on deck to report Q3 results this week, including three Mag 7 members – Alphabet GOOGL and Microsoft MSFT on Wednesday and Amazon AMZN on Thursday. By the end of this week, we will have seen Q3 results from more than 50% of S&P 500 members. With results from about a quarter of S&P 500 members already out, we see a continuation of the broad-based strength we've seen in the last few reporting cycles. While the growth pace remains strong, it does not compare favorably with other recent periods, particularly when some of the outlier numbers are excluded. Most importantly, the revisions trend remains positive, with estimates for 2026 Q4 and full-year 2027 continuing to rise. Looking at overall expectations for the quarter, combining the actual results from the 121 S&P 500 members that have reported already with estimates for the still-to-come companies, Q3 earnings are currently expected to increase by +26.2% from the same period last year on +12.2% higher revenues, the 8th straight quarter of double-digit earnings growth for the index. The Tech sector continues to be a major growth contributor, but the momentum is broad-based, with 14 of the 16 Zacks sectors on track to enjoy positive earnings growth and 6 generating double-digit earnings growth in Q3. The quarterly chart below details actual results alongside Q3 2026 growth expectations and forward projections. Image Source: Zacks Investment Research As noted earlier, the revisions trend has been positive, sustaining the favorable trend in place for almost a year. Estimates for Q3 increased after the quarter got underway, and we are seeing a similar trend at play for 2026 Q4 estimates, as the chart below shows. Image Source: Zacks Investment Research This positive revision behavior is not new; it extends a tailwind that has been building for nearly a year. The positive revisions were at first concentrated in Technology and, more recently, Energy following Middle East supply disruptions. However, for 2026 Q4 and also what we saw for Q3, the favorable estimate revisions have broadened significantly, rising across 7 of the 16 Zacks sectors—including Industrials, Basic Materials, Finance, Aerospace and Conglomerates alongside Tech and Energy since the start of October. On the negative side, Q4 estimates have come down since the start of October for 9 sectors, with the major declines at the Transportation, Autos, Consumer Staples, Consumer Discretionary, Construction, and Utilities sectors. It is important to note that estimates for full-year 2027 have also been similarly trending higher, which we show a little later in this note. Sector Focus: Broad-Based Strength This week's reporting line-up, comprising 172 S&P 500 members, is a representative sample of the index as a whole, ranging from the aforementioned Mag 7 members to Coca-Cola, Boeing, Caterpillar, Visa, Eli Lilly, and a host of Finance and other companies. The 6 sectors expected to enjoy double-digit earnings growth in Q3 are Aerospace (up +186.7%), Energy (+128%), Tech (+45.3%), Basic Materials (+32.6%), Transportation (+11.1%), and Industrial Products (+14.4%). Q3 earnings growth for the S&P 500 index drops to +21.6% from +26.2% once the Energy sector's contribution is excluded from the index. Excluding the Tech sector, Q3 earnings growth for the rest of the index drops to +16.1%. For the Mag 7 group, we already have actual results from Meta META and Tesla TSLA, and this week will bring results from Alphabet, Amazon, and Microsoft. The expectation is that Q3 earnings for the Mag 7 will increase by +22.3% on +23.1% revenues, as the chart below shows. Image Source: Zacks Investment Research Excluding the Mag 7 group's contribution, Q3 earnings for the rest of the index would actually improve to +27.6% (from +26.2%). The chart below shows quarterly earnings and revenue growth expectations for the Tech sector as a whole. Image Source: Zacks Investment Research The Q3 earnings and revenue growth rate drops to +23.1% from +45.3% once the substantial contributions from Nvidia NVDA, Micron MU, and Alphabet GOOGL are excluded, as the chart below shows. Image Source: Zacks Investment Research Q3 Earnings Season Scorecard Through Friday, October 23rd, we have seen Q3 results from 121 S&P 500 members, or 24.2% of the index's total membership. Total earnings for these companies are up +31.5% from the same period last year on +12.2% higher revenues, with 80.7% beating EPS estimates and 69.7% beating revenues estimates. The comparison charts below show the earnings and revenue growth rates for these companies compared to other recent periods. Image Source: Zacks Investment Research The very strong earnings and revenue growth pace for this group of 45 S&P 500 members is mostly due to Micron, whose Q3 earnings increased +1075.7% from the year-earlier level. Excluding the Micron contribution, Q3 earnings for the remaining 120 index members that have reported would be up +14%. The chart below shows the Q3 earnings growth pace for the companies that have reported, with and without Micron, across recent periods. Image Source: Zacks Investment Research The comparison charts below show the Q3 EPS and revenue beat percentages for these companies compared to other recent periods. Image Source: Zacks Investment Research For the Finance sector, we now have Q3 results from 55.3% of the sector's market capitalization in the S&P 500 index. Total earnings for these Finance sector companies are up +10% from the same period last year on +8.7% higher revenues, with 80.6% beating EPS estimates and 52.8% beating revenue estimates. The comparison charts below put the Q3 earnings and revenue growth rates in a historical context. Image Source: Zacks Investment Research The comparison charts below show the Q3 EPS and revenue beat percentages in a historical context. Image Source: Zacks Investment Research As you can see above, not only are the growth rates tracking below other recent periods, but Finance sector companies also seem to be struggling to beat consensus EPS and revenue estimates. The Earnings Big Picture The chart below shows the aggregate growth picture for the S&P 500 index on a calendar year basis. Image Source: Zacks Investment Research As we noted earlier, estimates for full-year 2027 are experiencing the same positive and broad-based revisions trend that we noted earlier in the context of 2026 Q4. The chart below shows how aggregate 2027 earnings expectations have evolved since the start of July. Image Source: Zacks Investment Research For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> Q3 Earnings Season Ramps Up, Outlook for Q4 and Full-Year 2027 Improves 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 Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Micron Technology, Inc. (MU) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Alphabet GOOGL is set to report third-quarter 2026 results on Oct. 28. For third-quarter 2026, the Zacks Consensus Estimate for earnings is pegged at $2.94 per share, up by a penny over the past 30 days, and indicating 2.44% year-over-year growth. The consensus mark for third-quarter revenues is pegged at $111.64 billion, implying growth of 27.63% from the year-ago quarter's reported figure. Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote Alphabet has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, with the average surprise being 86.65%. Image Source: Zacks Investment Research Let's see how things have shaped up for the upcoming announcement: Alphabet's third-quarter 2026 results are expected to have benefited from accelerating Google Cloud adoption, supported by strong demand for AI infrastructure, enterprise AI solutions and core Google Cloud Platform (GCP) services. In the second quarter of 2026, cloud revenues surged 82% year over year to $24.77 billion, while cloud backlog reached $514 billion, increasing by more than $50 billion sequentially. Cloud revenues are also expected to have benefited from expanding customer relationships, rising consumption and demand for Google's custom Tensor Processing Units (TPUs) systems. Google Search & Other is expected to have remained a key revenue contributor in the third quarter, driven by increasing search activity, healthy advertiser spending and AI-powered advertising improvements. In the second quarter of 2026, Search & Other revenues increased 17% year over year to $63.27 billion, primarily supported by retail and financial services advertisers. AI Overviews and AI Mode have been driving incremental search queries, while AI Max and Performance Max are helping advertisers improve campaign effectiveness. However, GOOGL cautioned that third-quarter growth comparisons would become tougher as Alphabet laps the acceleration in Search performance that began in third-quarter 2025. Alphabet's third-quarter 2026 performance is likely to have benefited from growth in YouTube advertising, supported by direct-response campaigns, brand advertising, Shorts and connected television. YouTube advertising revenues increased 13% year over year to $11.06 billion in the second quarter of 2026, reflecting strength across direct-response and brand campaigns. AI-powered Demand Gen campaigns, creator partnerships and new advertising formats are improving advertisers' ability to reach audiences across YouTube and Shorts. The growing popularity of connected television and increasingly effective shopping experiences are also expected to have supported advertising monetization. Increasing adoption of Gemini across consumer and enterprise applications is expected to have supported Alphabet's third-quarter performance. In the second quarter of 2026, Gemini API usage reached approximately 22 billion tokens per minute, up from more than 16 billion in the preceding quarter. The Gemini application reached 950 million monthly active users, while more than 9 million developers were building with Google's models each month. Strong adoption of Gemini Enterprise, AI development tools and model APIs is creating additional monetization opportunities across Google Cloud, Workspace and other services. However, higher depreciation, energy expenses, data center operating costs and AI-related hiring are expected to have pressured operating margins. GOOGL also anticipated modest near-term margin pressure from using third-party cloud capacity in the third quarter. Alphabet's shares have climbed 3.8% year to date (YTD), underperforming the broader Zacks Computer & Technology sector's return of 18%. Alphabet shares have underperformed peers including Apple AAPL, Amazon AMZN and Microsoft MSFT over the same timeframe. Shares of Apple, Amazon and Microsoft have returned 28%, 8.6% and 7.8%, respectively, YTD. Image Source: Zacks Investment Research GOOGL shares are overvalued, as suggested by Value Score C. Currently, GOOGL is trading at a premium, with a forward 12-month price/sales of 7.38X compared with the broader sector's 5.72X and Amazon's 2.91X. However, Alphabet shares trade at a discount compared with Microsoft's 9.37X and Apple's 9.70X. Image Source: Zacks Investment Research Alphabet's prospects are supported by its integrated AI portfolio spanning custom accelerators, Gemini models, data analytics, cybersecurity and enterprise applications. Google management has highlighted more than 17 product lines generating over $1 billion each in revenue. The company is gaining traction across enterprise AI infrastructure, BigQuery, Gemini Enterprise and Workspace, enabling opportunities to expand customer spending. Alphabet also highlighted that customers using Google's AI products consume 1.8 times as many products as non-AI customers, indicating significant cross-selling potential. Growing demand for AI training and inference represents a major long-term opportunity for Alphabet's infrastructure business. The company's custom TPUs, Axion CPUs and NVIDIA GPU offerings provide customers with multiple computing options. Alphabet is also commercializing TPU systems through cloud subscriptions, direct hardware sales and neocloud partnerships. Increasing enterprise adoption of agentic AI is expected to strengthen Alphabet's long-term growth prospects. Gemini Enterprise enables organizations to build autonomous agents, analyze proprietary data, automate business processes and improve operational efficiency. Alphabet has stated that more than 90% of Fortune 100 companies have been using Gemini Enterprise, and the platform is gaining adoption across financial services, retail, insurance and other industries. Alphabet's third-quarter 2026 performance is expected to have benefited from robust Google Cloud demand, growing AI adoption, sustained Search advertising momentum and improving YouTube monetization. The company's expanding Cloud backlog, growing enterprise customer base and increasing adoption of Gemini-powered solutions are encouraging. Despite a premium valuation, Alphabet's full-stack AI strategy, expanding TPU business, enterprise AI adoption and new advertising opportunities offer plenty of growth opportunities for investors. Alphabet currently has a Zacks Rank #2 (Buy), suggesting that it may be wise to buy the stock ahead of third-quarter earnings. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Alphabet Inc. (GOOGL) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects Microsoft (MSFT) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 28. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This software maker is expected to post quarterly earnings of $4.71 per share in its upcoming report, which represents a year-over-year change of +14%. Revenues are expected to be $90.59 billion, up 16.6% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.35% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Microsoft, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.29%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Microsoft will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Microsoft would post earnings of $4.21 per share when it actually produced earnings of $4.74, delivering a surprise of +12.59%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Microsoft appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Computer - Software industry, Manhattan Associates (MANH), is soon expected to post earnings of $1.46 per share for the quarter ended September 2026. This estimate indicates a year-over-year change of +7.4%. This quarter's revenue is expected to be $296.82 million, up 7.6% from the year-ago quarter. The consensus EPS estimate for Manhattan Associates has been revised 0.3% higher over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +1.65%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Manhattan Associates will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. 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 Manhattan Associates, Inc. (MANH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

(Updates with latest market prices and developments.) US benchmark equity indexes were mostly higher intraday, with big technology names among notable gainers at the start of a busy earnings week. The Nasdaq Composite was up 1.2% at 26,463.4 after midday Monday, while the S&P 500 rose 0.5% to 7,699.7. The Dow Jones Industrial Average edged down 0.1% to 51,978.1. Most sectors were in the red, led by utilities, while consumer discretionary paced the winners with a 2.7% advance followed by tech's 1.5% gain. Amazon.com (AMZN) was up 5% intraday, the best performer on the Dow, followed by IBM, Nvidia (NVDA), Alphabet (GOOG, GOOGL), and Microsoft (MSFT). Alphabet likely saw "relatively healthy" Google search revenue growth in the third quarter, driven by higher pricing amid solid search volume, Deutsche Bank said Monday. On the S&P 500, Datadog (DDOG) jumped 6.5%, the biggest gain on the index, followed by SanDisk (SNDK) and Marvell Technology (MRVL). Netflix (NFLX) is expected to report quarterly earnings on Tuesday, with Facebook and WhatsApp parent Meta Platforms (META) and electric vehicle manufacturer Tesla (TSLA) scheduled to release theirs on Wednesday after market close. GE Aerospace (GE), Philip Morris International (PM), Thermo Fisher Scientific (TMO), Procter & Gamble (PG) and American Express (AXP) also report this week. Oppenheimer Asset Management upgraded its S&P 500 full-year earnings outlook, saying the third-quarter reporting season got off to a solid start. The firm continues to expect the index to close 2026 out at 8,100. "Our expectations are that another better-than expected quarter is in the offing," Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said in a report Monday. "Given the economic and corporate fundamentals experienced over the course of recent quarters along with watershed innovation that has seen reports of increased adoption of (artificial intelligence) by businesses and consumers, stocks may well have further upside ahead before year-end." Treasury yields were higher intraday, with the 10-year rate up five basis points at 5.15%, while the two-year rate rose 3.8 basis points to 4.77%. West Texas Intermediate crude oil edged up 0.5% to $101.89 a barrel intraday, while Brent dropped 0.5% to $109.34. US President Donald Trump on Friday signed an executive order to waive key sanctions and tariffs on Russia. Trump had recently lifted sanctions on Russian diesel exports. Meanwhile, Russian President Vladimir Putin has proposed a meeting between Trump and Chinese President Xi Jinping and himself next month to discuss a potential deal to end the Ukraine war, The Wall Street Journal reported, citing people familiar with the discussions. Spot gold fell 0.7% to $4,138.60 per troy ounce, while silver ticked up 0.1% to $57.34 per ounce.

Diamond Hill Capital, a First Eagle Investment Management company, issued its Q3 2026 investor letter for its "Large Cap Strategy". The letter can be downloaded here. The Strategy returned 3.18% (net of fees) in the quarter, outperforming the 2.61% return of the Russell 1000 Value Index. Key positive contributors included stock selection in information technology, an underweight in utilities, and an overweight in energy, while detractors were found in industrials, health care, and consumer staples. Looking ahead, the firm anticipates below-average returns due to high equity market valuations, although attractive bottom-up investment opportunities remain. Notably, software and legacy technology stocks outperformed in Q3 2026, despite recent index exclusions; some AI-related stocks that had boosted the index previously underperformed. Additionally, reviewing the Strategy's top five holdings provides insight into its best positions for 2026. In its Q3 2026 investor letter, Diamond Hill Capital Large Cap Strategy highlighted Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On October 15, 2026, Microsoft Corporation (NASDAQ:MSFT) closed at $539.44 per share, reflecting a market capitalization of $4.01 trillion. Microsoft Corporation (NASDAQ:MSFT) posted a one‑month return of 9.25%, while its shares gained 5.04% over the past 52 weeks. Diamond Hill Capital Large Cap Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2026 investor letter: "Shares of Microsoft Corporation (NASDAQ:MSFT) rose after the company reported strong Azure results that included a growth reacceleration in quarterly results and guidance. Microsoft remains very well positioned to implement AI into its current offerings while also adding enormous AI computing capacity to lease to customers on attractive economic terms." Microsoft Corporation (NASDAQ:MSFT) ranks second on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 273 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the second quarter, compared to 282 in the previous quarter. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we discussed Microsoft Corporation (NASDAQ:MSFT) and shared a list of the most active blue-chip stocks to buy. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. This article is originally published at Insider Monkey.

- UBS raised its target to $675 from $525, citing Azure and Microsoft 365 fundamentals despite higher growth expectations. - Citi analyst Tyler Radke raised the firm's price target to $636 from $600 and maintained a 'Buy' rating. - UMass Memorial Health partnered with Microsoft and Accenture on a multi-year Azure data-platform initiative that will connect clinical, operational and research data and introduce AI tools to automate workflows. Microsoft (MSFT) is drawing fresh analyst attention on Thursday ahead of its upcoming earnings report, with four firms raising their price targets on the stock. According to The Fly, TD Cowen, Mizuho, Citi and UBS raised their Microsoft price targets, citing Azure trends, cloud demand and enterprise AI adoption. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox MSFT stock traded nearly 0.5% higher at the time of writing. According to The Fly, TD Cowen raised its price target on Microsoft to $625 from $540 and maintained a 'Buy' rating. The firm updated its model ahead of quarterly results, seeing the potential for a "higher than normal" beat on Azure as the third-party data it tracks screened strongest in history, alongside a full quarter of Fairwater and a bullish read on an OpenAI growth inflection. Mizuho analyst Gregg Moskowitz raised the firm's price target to $600 from $510 and maintained an 'Outperform' rating. Moskowitz said Mizuho's channel checks in Q3 were "very healthy overall," with strong public cloud and consumption data points and AI adoption remaining robust. Citi analyst Tyler Radke raised the firm's price target to $636 from $600 and maintained a 'Buy' rating, according to The Fly. Citi said its recent chief investment officer survey and reseller checks reinforced its view that Microsoft's core productivity and public cloud franchise should accelerate as enterprises increase AI spending. The analyst also considers Microsoft among the best-positioned AI vendors. Meanwhile, UBS analyst Karl Keirstead raised the price target on the stock to $675 from $525 and maintained a 'Buy' rating. He said the stock's 39% rally had raised growth expectations, but Azure and Microsoft 365 fundamentals supported the optimism and the valuation remained reasonable. Separately, UMass Memorial Health announced a multi-year initiative with Microsoft and Accenture (ACN) to modernize its data platform using Microsoft Azure. The unified platform is intended to replace siloed reporting systems and support more advanced analytics. The initiative will also move UMass Memorial's electronic health record to Azure, connecting clinical, operational and research data on one platform. The health system aims to use the connected data to advance quality and safety goals, including reducing patient length of stay and caregivers' administrative burden. Accenture will introduce agentic AI tools to automate complex workflows and uncover insights. UMass Memorial Health expects the transformation to improve speed, quality and security while lowering long-term infrastructure costs. Retail sentiment on Stocktwits remained in 'bearish' territory, while message volume was 'normal' over the past 24 hours. MSFT shares have gained over 10% year-to-date. Also read: PAG Stock Surges Today – Everything To Know About Its $16.3B Take-Private Deal For updates and corrections, email newsroom[at]stocktwits[dot]com. Heera Hari has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: - SOXX Extends Selloff After 8-Day Decline, KOSPI Rebounds: Jim Cramer Calls SK Hynix 'Epicenter Of Fear' - COST Stock Heads For Best Week Since May: Costco's Digital Sales And Membership Growth Get Bullish Call From Analyst - HIMS Stock Snaps 3-Day Slump On Peptide Hopes: Trump Administration Reviews Plan That Could Unlock $2.2B Market

Amazon.com (AMZN) stock trades at 20.5 times earnings for the twelve months to June 2026. Those earnings actually exceeded the company's operating profit. In the quarter to June 2026 alone, net income was $62.6 billion against operating income of $27.5 billion. The scenario grows all of those earnings, including the part from outside the business. Amazon's multiple is well below the 41.2 average recorded at the stock's last 12 fiscal quarter ends, partly because those earnings were so high. So is the market underpricing Amazon, and what would the stock be worth in three years if its business grew and the multiple stayed put? What Could Amazon Stock Be Worth At Today's P/E? Under a few Trefis assumptions, Amazon stock would be worth about 34.7% more in three years at today's P/E. This scenario models revenue growing a little slower than it did in the twelve months to June 2026. The operating margin ends nearer today's level than its lower past average. Here is Amazon today beside the scenario three years on: | Today | In three years (scenario) Revenue | $776 billion | $1,131 billion Operating margin | 12.1% | 11.2% Earnings | $135 billion | $182 billion P/E | 20.5 | 20.5 Share price | $254.08 | $342.25 All of that gain would come from Amazon's business, none from a higher multiple. The scenario holds the P/E at today's level, which sits well below its old average. Within the business operations, the gain comes from Amazon selling more. Yet part of that progress is lost to the slightly lower margin. Is Recent Growth Ahead Of The Scenario's Pace? Amazon's revenue grew 15.8% in the twelve months to June 2026, outpacing the scenario's 13.4% a year. Growth accelerated in the quarter to June 2026. It reached 19.6%, against 13.3% in the same quarter of 2025. Management's only revenue guide is for the quarter to September 2026. They expect growth of 9% to 12%, which falls below the scenario's yearly pace. Amazon reports three segments: North America, International and Amazon Web Services (AWS). AWS grew fastest in fiscal 2025. It expanded by 19.7%, up from 18.5% in fiscal 2024. North America is the largest segment and grew 10.0% that year. At that rate, the other two segments would need to grow faster than the scenario's pace. International grew 13.3% in fiscal 2025, just under it, so AWS would carry most of the load. Amazon Stock With Weaker Revenue, Margins Or P/E In each row below, one assumption differs from the scenario while the rest stay as they are: If instead | Upside Nothing changes (the scenario) | 34.7% Revenue growth of 11.4% a year instead of 13.4% | 27.7% Operating margin of 9.0% in year three instead of 11.2% | 8.7% 5 years at the same assumptions instead of 3 | 73.2% Amazon starts from a high margin. It stands at 12.1% today, against a 9.0% average at quarter ends from June 2023 to March 2026. The scenario also holds the share count at today's level. Yet Amazon's diluted count rose 4.3% in the three years to June 2026. With more shares, each one would get a smaller part of the gain. Taken alone, revenue growth could slow from 15.8% in the twelve months to June 2026 to 2.7% a year before three years of owning the stock return nothing. On those same terms, the operating margin could fall from 12.1% today to 8.3%. The P/E could fall from 20.5 today to 15.2. Looking ahead, Amazon's revenue growth for the quarter to September 2026 is the measure to watch in the report expected on or around October 28, 2026. How To Act On AMZN? Now you know AMZN better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks. There is a smarter choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If you'd rather act on AMZN itself: Play Offense | Play Defense Learn More About AMZN & Invest | Save Taxes On Capital Gain Earn From AMZN Cash Secured Puts | Covered Call Against AMZN See Your Next Steps On AMZN

International Business Machines Corporation IBM is scheduled to report third-quarter 2026 earnings after the closing bell on Oct. 21. The Zacks Consensus Estimate for sales and earnings is pegged at $16.84 billion and $2.87 per share, respectively. Earnings estimates for IBM for 2026 have remained static at $12.33 per share over the past 60 days, but are up 0.08% for 2027 to $13.20. IBM Estimate Trend Image Source: Zacks Investment Research The cloud and data platform provider delivered a four-quarter earnings surprise of 4.6%, on average, beating estimates thrice. In the last reported quarter, the company matched the earnings estimate. Image Source: Zacks Investment Research Our proven model does not predict an earnings beat for IBM for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. IBM currently has an ESP of -0.63% with a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here. During the third quarter, IBM entered into a multi-year, $240 million agreement with Together AI to support the growing demand for enterprise artificial intelligence (AI) inference. The partnership will enable IBM to expand its cloud infrastructure offerings for open-source AI workloads and strengthen its position in the rapidly growing AI infrastructure market. IBM also introduced a new set of AI-powered experiences for the 2026 U.S. Open to make live tennis more personalized, informative and interactive for millions of fans worldwide. By turning complex court-level data into accessible insights, the company helped fans better understand the game through advanced technology. Such investments in innovation and collaborations will likely boost IBM's commercial prospects and are likely to have generated incremental revenues for the Software segment. During the to-be-reported quarter, IBM partnered with India-based AI company Sarvam to develop and test sovereign AI technologies for government agencies and regulated industries in the subcontinent. The collaboration aims to build AI systems that give organizations greater control over data, governance and operations while supporting digital transformation across the public sector. IBM also collaborated with Arm Holdings plc ARM to give enterprises more software choices for mission-critical workloads. IBM's latest processor will enable Arm-native Linux environments to run alongside z/OS and Linux on IBM Z, giving enterprises access to a broader software ecosystem while maintaining security, reliability and scalability. These are likely to have generated additional revenues for the Consulting segment. However, despite solid hybrid cloud, quantum technology and AI traction, IBM faces stiff competition from Amazon Web Services and Microsoft's Azure. The company is also facing challenges from AI firm Anthropic as the latter's Claude Code tool can modernize legacy COBOL systems — a foundational programming language deeply embedded in IBM's mainframe ecosystem. By proposing to substantially automate code exploration, documentation, refactoring and security analysis, Claude Code threatens to reduce enterprises' reliance on specialized legacy service providers like IBM, putting its business model at stake. This is likely to redefine the competitive landscape, leading to a broad-based downslide across the sector. Increasing pricing pressure is eroding margins, and profitability has trended down over the years, barring occasional spikes. Over the past year, IBM has plummeted 17.8% against the industry's rise of 140.6%, lagging its peers like Microsoft Corporation MSFT and Amazon.com, Inc. AMZN. While Microsoft has gained 5.8%, Amazon surged 19.8% over this period. One-Year IBM Stock Price Performance Image Source: Zacks Investment Research From a valuation standpoint, IBM appears to be trading at a premium relative to the industry and above its mean. Going by the price/earnings ratio, the company shares currently trade at 17.73 forward earnings, higher than 10.74 for the industry and the stock's mean of 17.2. Image Source: Zacks Investment Research IBM aims to benefit from the increasing propensity of business enterprises to undertake a cloud-agnostic and interoperable approach to secure multi-cloud management with a diligent focus on hybrid cloud and generative AI solutions. With a surge in traditional cloud-native workloads and associated applications, along with a rise in generative AI deployment and quantum computing, there is a radical expansion in the number of cloud workloads that enterprises are currently managing. This has resulted in heterogeneous, dynamic and complex infrastructure strategies, which have led to a healthy demand trend. However, IBM's margins might have been strained by limited cost-cutting opportunities and intense competitive pressures, likely delaying key product launches. Stiff competition from established players and new challengers has dented its growth prospects. Management observed that rapidly evolving, industry-wide cybersecurity concerns adversely impacted the client's buying patterns as quarterly capex spending shifted more toward servers, storage and memory purchases. This is likely to have affected its Infrastructure business in the quarter. IBM is trading at a premium valuation, and investors could wait for a better entry point to cash in on its long-term fundamentals. The stock has also witnessed a downtrend in its price performance over the past year. Consequently, it might be prudent to trade with caution at the moment. IBM expects its growth to be driven primarily by analytics, cloud computing and security services. A better business mix, improving operating leverage through productivity gains and increased investments in growth opportunities will likely be conducive to long-term growth. IBM is expected to benefit in the long run from strong demand for hybrid cloud and AI, which will likely drive growth in the Software and Consulting segments. Investors might therefore hold the stock for long-term gains. 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 International Business Machines Corporation (IBM) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report ARM Holdings PLC Sponsored ADR (ARM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). 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