Earnings Outlook: Microsoft earnings: Trillion-dollar valuation is banking on continuing cloud growth

Growth of Microsoft Corp.’s cloud service Azure will be key in determining whether the software giant maintains its leading trillion-dollar market cap after its earnings report.

Microsoft MSFT, +0.26% is scheduled to report fiscal fourth-quarter earnings after the bell on July 18. Shares closed at a record high $138.40 on Thursday, and are up 36% year to date, compared with the 31% gain in the iShares Expanded Tech-Software Sector ETF IGV, +0.02% In comparison, the S&P 500 index SPX, +0.21% is up nearly 20% for the year.

With Azure revenue rising 73% in the last quarter from year ago levels, and shaping up as the company’s fastest-growing segment, investors are concerned whether that pace can be sustained and whether Microsoft can continue to chip away at Amazon.com Inc.

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