Microsoft Earnings Are July 29. Trade Either Side With Leveraged and Inverse ETFs

This is sponsored content.  Barchart is not endorsing the websites or products set forth below.

As one of the world's largest and most impactful technology companies, Microsoft (MSFT) is at a crossroads. On one hand, the company is generating some of its strongest fundamental numbers in recent history, with Azure growing at record pace, AI revenue accelerating, and a commercial backlog that has nearly doubled year-over-year.¹ On the other hand, the stock is down roughly 20% over the past 52 weeks as of July 21, 2026, dramatically underperforming the broader market as investors debate whether Microsoft's record AI spending will generate returns fast enough to justify the cost.²

This divergence between growing fundamentals and a depressed share price can create immense volatility leading up to and after earnings. With Microsoft confirming Q4 fiscal 2026 earnings after market close on July 29, the Direxion Daily MSFT Bull 2X ETF (MSFU) and the Direxion Daily MSFT Bear 1X ETF (MSFD) offer leveraged long and inverse exposure to that move in a single trade.

MSFT Stock Performance

Microsoft has a lot riding on its July 29 earnings report. While the company has seen historic revenue growth across its AI and cloud divisions, it is also facing persistent downward pressure from a market that remains skeptical about its record capital spending. Here are the biggest factors shaping the outlook heading into earnings.

MSFT Bullish Indicators

Cloud revenue is surging Azure revenue grew 40% year-over-year in Microsoft's most recent quarter, with demand still exceeding available capacity. Azure holds roughly 21% of the global cloud infrastructure market and continues to gain share.¹

AI revenue is growing rapidly The company's AI business surpassed $37 billion in annual recurring revenue, up 123% year-over-year, as Microsoft 365 Copilot and Azure AI services accelerate across the enterprise customer base.³

Backlog and new AI unit Microsoft entered earnings season with a commercial remaining performance obligation of $627 billion, up 99% year-over-year.¹ In July, the company launched Microsoft Frontier Co. with a $2.5 billion investment, a new AI implementation unit aimed at accelerating customized enterprise deployment.⁴

MSFT Bearish Indicators

Record capital spending under scrutiny Microsoft has guided for approximately $190 billion in capital expenditures in fiscal 2026. Investors have pushed back hard on whether that level of spending can sustain strong free cash flow, and the stock has remained under pressure despite consistently beating earnings estimates.¹

Market skepticism has weighed on the stock MSFT is down roughly 20% over the past 52 weeks as of July 15, 2026, while the S&P 500 gained approximately 20% over the same period.² The market has repeatedly responded to strong quarterly results with sell-the-news reactions, leaving the stock well below analyst price targets.

Growing regulatory footprint Microsoft was designated a critical third-party provider to the U.K. financial sector on July 13, 2026, placing it under direct oversight from the Bank of England, the Prudential Regulation Authority, and the Financial Conduct Authority. While not immediately disruptive, the designation signals increasing global regulatory scrutiny of Azure's systemic role.³

Wall Street Is Bullish. The Market Remains Skeptical.

Of 50 analysts covering MSFT, the consensus is Strong Buy, with a mean 12-month price target of $548.06.⁵ Wall Street is projecting Q4 fiscal 2026 EPS of $4.21, up approximately 15% year-over-year from $3.65, with full fiscal year 2026 EPS of approximately $16.71, a 22.5% increase over fiscal 2025.⁶

Microsoft has beaten earnings estimates in each of its last four quarters with an average surprise of roughly 8%.⁶ Microsoft reports Q4 fiscal 2026 earnings after market close on July 29, 2026.

Trade MSFT Volatility With MSFU and MSFD

Traders now have a direct tool to trade this volatility on either side without managing margin requirements or multiple derivative positions. The Direxion Daily MSFT Bull 2X ETF (MSFU) and the Direxion Daily MSFT Bear 1X ETF (MSFD) each track the common shares of Microsoft Corporation (MSFT).⁷

• MSFU targets 200% of the daily performance of MSFT. When MSFT rises 1%, MSFU targets a 2% gain before fees. When MSFT falls 1%, MSFU targets a 2% decline before fees.
• MSFD targets -100% of the daily performance of MSFT. When MSFT falls 1%, MSFD targets a 1% gain before fees. When MSFT rises 1%, MSFD targets a 1% decline before fees.

Both funds reset their leverage daily and are designed for active traders who monitor their positions.

Will Microsoft Deliver? Trade the Volatility With Direxion.

Microsoft enters earnings day with the fundamentals to deliver another beat and the analyst support to see meaningful upside if the market finally closes the gap between the stock price and where Wall Street says it belongs. Whether July 29 becomes the catalyst that reboots MSFT or extends the drawdown, the Direxion Daily MSFT Bull 2X ETF (MSFU) and the Direxion Daily MSFT Bear 1X ETF (MSFD) give active traders leveraged exposure to that move without managing complex options strategies or multiple orders.

Sources

¹https://www.barchart.com/story/news/3148287/jefferies-says-microsoft-stands-out-in-strong-cloud-spending-as-azure-gains-market-share-what-this-means-for-msft-stock 

² https://www.barchart.com/stocks/quotes/MSFT 

³https://www.barchart.com/story/news/3255080/dear-microsoft-stock-fans-mark-your-calendars-for-july-13 

⁴https://www.barchart.com/story/news/3114616/microsoft-corporations-quarterly-earnings-preview-what-you-need-to-know 

⁵https://www.barchart.com/stocks/quotes/MSFT/analyst-ratings 

⁶https://www.barchart.com/stocks/quotes/MSFT/earnings-estimates 

⁷https://www.direxion.com/product/daily-msft-bull-and-bear-leveraged-single-stock-etfs

Past performance is not indicative of future results.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in MSFT.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Microsoft Corporation Investing Risk — Microsoft Corporation faces risks associated with competition in the technology sector and among platform based ecosystems, including its cloud-based services; the evolution of its business, including the development of its new products and acquisitions, joint ventures and strategic alliances; cybersecurity, data privacy and platform abuses; significant investment may occur on products and services that do not achieve their expected results; operations, including excessive outages, data losses or disruptions of online services; quality or supply problems; legal, regulatory and litigation risks; and the ability to attract and retain talented employees.

Technology Sector Risk — The market prices of technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices.

Distributor: ALPS Distributors, Inc.

The above is sponsored content. Barchart was paid up to six hundred and twenty thousand dollars  for placement and promotion of the content on this site and other forms of public distribution covering the period of July - December 2026.  For more information please view the Barchart Disclosure Policy here.