{"id":122611,"date":"2026-07-29T10:35:12","date_gmt":"2026-07-29T10:35:12","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/122611\/"},"modified":"2026-07-29T10:35:12","modified_gmt":"2026-07-29T10:35:12","slug":"microsoft-set-for-190-billion-market-value-swing-after-earnings-results-options-indicate","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/122611\/","title":{"rendered":"Microsoft set for $190-billion market value swing after earnings results, options indicate"},"content":{"rendered":"

Options traders expect a roughly US$190-billion swing in Microsoft\u2019s (MSFT-Q<\/a>) market value after it reports \u200bearnings on Wednesday, an unusually large move that underscores investors\u2019 \u200cgrowing eagerness to see if billions of dollars in AI spending are beginning to pay off.<\/p>\n

The tech company\u2019s options imply a move of about 6.6 per cent in either direction after the company reports fourth-quarter results. By comparison, over the last 12 \u2060earnings cycles, \u200bMicrosoft has averaged a 4.8-per-cent implied move and a 4.4-per-cent actual move, Option Research & Technology Services (ORATS) data showed.<\/p>\n

The significantly higher pricing this quarter suggests that investors view Microsoft \u2014 one of the hyperscalers whose massive AI capital spending is at the heart of this year\u2019s AI rally and the broader bull market \u2014 as \u200bcentral to the AI earnings story.<\/p>\n

With the AI trade now faltering, \u200cinvestors who flocked to technology stocks are growing wary of ever-rising costs.<\/p>\n

At their current trajectory, the hyperscalers are expected to spend more combined on capital expenditures than they generate in free cash flow by 2027, Reuters reported last week.<\/p>\n

\u201cThe market is looking for results,\u201d said Seth Hickle, chief investment officer at Mindset Wealth Management. \u201cThis earnings season is about AI execution, not \u200cAI enthusiasm.\u201d<\/p>\n

Microsoft\u2019s \u200bshares have fallen 18.7 per cent this year, \u200cwhile the S&P 500 is up 8.52 per cent. Its fiscal third-quarter capital expenditure rose 49 per cent year-over-year to US$31.9-billion, down \u200bfrom the previous quarter\u2019s US$37.5-billion.<\/p>\n

Investors will be watching whether Microsoft\u2019s \u2060AI investments are translating into stronger enterprise adoption.<\/p>\n

Beyond its Azure cloud computing platform growth, they \u2060are also eyeing whether customers are embracing Microsoft\u2019s AI tools within its ecosystem or turning to outside providers.<\/p>\n

\u201cInvestors have seen the AI \u200bspending. Now they want to see the receipts,\u201d said Peter Andersen, founder and CEO of Andersen Capital Management. \u201cFOMO \u2018Fear of Missing Out\u2019 is now \u2018Fear of Massive Overbuilding\u2019.\u201d<\/p>\n

Still, many investors remain bullish. A trader spent about US$10.4-million on Monday to buy 20,000 call options tied to Microsoft\u2019s stock ahead of earnings, betting the shares will rise above US$450 by August, according to \u2060Chris Murphy, co-head of derivatives strategy at Susquehanna, a market maker. Calls give the buyer the right to purchase a stock at a set price by a specific date.<\/p>\n

\u201cInvestors were willing to pay high option premiums for upside exposure,\u201d said Murphy, despite recent stock underperformance, which has prompted Microsoft to cut jobs and restructure its Xbox-related business.<\/p>\n

Investors also made bullish bets on the software sector, buying 100,000 call options on the \u2060iShares Expanded Tech-Software Sector exchange-traded fund ahead of Microsoft\u2019s earnings and \u200bthe Federal Reserve\u2019s meeting, reflecting confidence in both the stock and the broader software sector, Murphy said.<\/p>\n

Meta (META-Q<\/a>) options imply a 7.8-per-cent move after it reports results on Wednesday, slightly above the 7.3 per cent average implied move over the last \u200c12 earnings cycles, according to ORATS data. Historically, Meta\u2019s stock tends to move slightly more than options markets anticipate, averaging \u200b7.9 per cent.<\/p>\n

Matt Amberson, founder of ORATS, said earnings-related volatility has increased over the past year, with particularly large reactions in the last three quarters.<\/p>\n

Investors will focus on the strength of Meta\u2019s core advertising business, the impact of AI on engagement and advertising efficiency, and whether the returns from its expanding \u200binfrastructure investments can justify the level of spending, said Matthew Smart, chief investment officer at WWM Investments.<\/p>\n","protected":false},"excerpt":{"rendered":"Options traders expect a roughly US$190-billion swing in Microsoft\u2019s (MSFT-Q) market value after it reports \u200bearnings on Wednesday,…\n","protected":false},"author":2,"featured_media":122612,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[1262,1249,420,7829,1263,1242,1240,1264,1261,1239,1255,1256,1252,1241,1238,980,76,88,1254,1248,1275,1243,1244,597,1250,1251,774,1265,320,7828,1247,1270,1271,1273,1268,1272,1266,1269,1245,1258,1259,464,1257,1267,915,134,1260,1253,465,1246,1274],"class_list":["post-122611","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-alberta","tag-arts-news","tag-azure","tag-azure-ai","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-microsoft","tag-microsoft-ai","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/122611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=122611"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/122611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/122612"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=122611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=122611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=122611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}