10:55 AM EDT, 10/20/2025 (MT Newswires) -- Microsoft's ( MSFT ) fiscal Q1 results on Oct. 28 will likely benefit from "solidly" in-line Azure activity amid strength from security and artificial intelligence projects, BofA Securities said in a note Monday.

The brokerage said channel checks with Microsoft's ( MSFT ) partners indicate "deal activity remains healthy with inline or better results."

BofA expects 0% to 1% upside to its Q1 revenue estimate for the company of $77 billion, which would represent 18.2% year on year growth, and a 16.2% increase in constant-currency terms.

However, the strength in security may be offset by factors like softness in other areas due to "capacity constraints" as the company's clients launch workloads that use more computing power, including AI services, the investment firm said.

Meanwhile, Microsoft ( MSFT ) is taking a "strategic and measured approach to AI infrastructure expansion" as it balances scale and energy independence, BofA said, adding it expects the company to make an upward revision to capital expenditure, which would be a potential catalyst for its share price.

BofA kept its buy rating on Microsoft ( MSFT ) $640 price target.

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