Microsoft (MSFT  ) stock is falling after the company reported third-quarter (Q3) financial results on Wednesday. Here is what analysts are saying about the quarter and the future of the technology giant:

• Scotiabank analyst Patrick Colville reiterated an Outperform rating on Microsoft and lowered the price target from $600 to $550.
• JPMorgan analyst Mark Murphy maintained an Overweight rating on Microsoft with a price target of $550.

Q3 results were "healthy" and "slightly positive," Colville said in a new investor note.

The analyst said it's "full speed ahead" with fourth-quarter guidance and fiscal 2027 targets.

"We think this print will serve as a major clearing event for MSFT stock," Colville said.

Management provided highlights on Azure re-acceleration, M365 Copilot, the OpenAI revised deal and CapEx - all areas that were concerns heading into the print.

Colville said it's nice to see that capex spending is "converting into accelerating incremental revenue," based on Azure guidance.

"We remain steadfast based on our extensive partner and CIO checks that MSFT is a leading horseman of the AI revolution, with the price rises and E7 launch likely to improve the vibes in the Productivity segment."

JPMorgan On Microsoft

Microsoft is "delivering where it matters," Murphy said in a new investor note. While Azure revenue came in above consensus, Murphy still has some concerns.

"From a high-level optics perspective, it remains the case that Amazon (AMZN  ), Google (GOOG  ) (GOOGL  ), and Oracle (ORCL  ) are each accelerating their respective cloud growth rates faster than Azure at the moment," Murphy said.

The analyst said "patience will be rewarded" when it comes to Microsoft. Higher CapEx and spending should translate into top-line growth, he says.

"This thesis is likely beginning to manifest, with guidance for FQ4 Azure CC growth calling for another uptick against a tough comp and landing above expectations," Murphy added.

Azure growth has been in the 35% to 39% range each quarter for about a year. Don't expect to exceed that range in the future, he added.

"Azure should be appreciated as a massive business growing at a remarkable scale, coupled with explicit comments of demand exceeding capacity."

The higher CapEx guide could take some time for investors to digest, Murphy predicted. The analyst said the higher spending signals strong demand and future growth.

"Overall, in our view, Microsoft is checking the boxes on two of the most important aspects," Murphy said, highlighting Azure growth and the M365 Copilot momentum as being the two key boxes.

Price Action

Microsoft stock is down 5% to $403.27 on Thursday versus a 52-week trading range of $356.28 to $555.45. The stock is down 14.7% year-to-date in 2026.