Key Takeaways
- Microsoft (MSFT) significantly surpassed Q4 2025 revenue and EPS estimates, driven by strong growth in its Intelligent Cloud segment, particularly Azure.
- Qualcomm (QCOM) reported Q3 2025 adjusted earnings and revenue that beat analyst expectations, with a Q4 outlook largely in line with estimates.
- The Federal Reserve maintained its target range for the federal funds rate at 4.25% to 4.5%, despite a notable dissent from two governors, signaling internal divisions on the economic outlook.
- Futures indicate a reduced probability of a September rate cut following Chair Powell's cautious remarks on future policy decisions.
Technology giants Microsoft (MSFT) and Qualcomm (QCOM) delivered strong earnings reports today, exceeding analyst expectations and highlighting continued robust performance in the tech sector. Meanwhile, the Federal Reserve opted to hold interest rates steady, a decision met with unusual dissent among its policymakers, underscoring ongoing economic uncertainties.
Microsoft's Cloud Dominance Fuels Q4 Outperformance
Microsoft (MSFT) announced impressive financial results for its fourth quarter of fiscal year 2025, with revenue reaching $76.44 billion, significantly exceeding the estimated $73.89 billion. The company's adjusted Earnings Per Share (EPS) stood at $3.65. A key driver of this strong performance was the Intelligent Cloud segment, which generated $29.88 billion in revenue, surpassing estimates of $29.1 billion. Within this segment, Azure and other cloud revenue (excluding FX impacts) surged by 39%, outperforming the estimated 34.2% growth. This indicates sustained demand for Microsoft's cloud services, particularly in the realm of artificial intelligence, which has been a significant investment area for the company. Microsoft's Q4 2025 results underscore its leadership in AI-driven transformation, with its AI business now exceeding a $15 billion annual revenue run rate, up 150% year-over-year.
Qualcomm Beats Estimates, Provides Consistent Q4 Outlook
Qualcomm (QCOM) also reported a strong third quarter for fiscal year 2025, with adjusted EPS of $2.77, beating the analyst consensus of $2.71. The company's adjusted revenue came in at $10.37 billion, slightly above the estimated $10.35 billion. Qualcomm's net income for the quarter was $2.67 billion, with GAAP EPS at $2.43. Looking ahead, Qualcomm provided a Q4 revenue guidance of $10.3 billion to $11.1 billion, with an estimated adjusted EPS range of $2.75 to $2.95. These projections are largely in line with analyst expectations, suggesting a stable outlook for the semiconductor giant as it continues to expand beyond smartphone chipsets into areas like IoT, automotive, and edge AI.
Federal Reserve Holds Rates, Powell Signals Data-Dependent Approach
The Federal Open Market Committee (FOMC) concluded its meeting today by deciding to maintain the federal funds rate within its current target range of 4.25% to 4.50%. This decision was not unanimous, with two Fed governors reportedly dissenting, marking the first time two governors have voted against the majority decision in over three decades. This internal division reflects differing views on the economic outlook, particularly concerning inflation and labor market conditions.
During the subsequent press conference, Fed Chair Jerome Powell emphasized a data-dependent approach to future monetary policy. Powell stated that the Fed would need to see upcoming employment and inflation reports before making any decisions on rate adjustments. His cautious remarks led to a shift in market expectations, with futures now indicating only a 45% chance of a 25 basis point rate cut in September, down from 68% prior to his comments. Powell acknowledged that while the labor market remains solid, there are "downside risks" worth monitoring closely, and that differences in views among policymakers are expected.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.