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The fanfare for second-quarter earnings season has been mixed. While many companies have seen mixed results and reactions around earnings so far, some companies will have no choice but to exceed expectations and have good news. After all, if the S&P 500 was at all-time highs and up 20% so far in 2019 alone, and if your shares are up far more than the market, investors likely will have built-in high expectations.

Microsoft Corp. (NASDAQ: MSFT) is due to report earnings after the closing bell on Thursday, and its shares were the second-best Dow performer on last look, with a gain of 34% so far in 2019.

Microsoft had a $1.04 trillion market cap heading into Thursday, the largest in the world, and the shares were within 3% of their all-time high. This report also will mark the company’s fiscal fourth-quarter report for 2019. While much of the market can talk endlessly about valuations being stretched and can point out that many top companies can hide behind slowing global growth and China trade war risks, expectations remain high here.

The consensus estimates from Refinitiv were calling for $1.21 in earnings per share (EPS) and $32.75 billion in revenues for the fourth quarter alone. That would compare to EPS of $1.13 and $30.1 billion in revenues a year earlier.

For guidance ahead, Refinitiv shows the coming quarter consensus estimates as $1.19 EPS on $32 billion in revenues, and fiscal year 2020 consensus estimates are $5.11 EPS on revenues of $138.7 billion.

As you would expect with performance of this magnitude, Wall Street analysts have been talking up expectations for Microsoft shares ahead of earnings. It’s important to consider that this stock’s strength has not been in a straight line up either. The shares dipped from $130 at the start of May down to $120 or so as the “sell in May and go away” theme was strong. Then Microsoft turned around in June and went on to hit new highs above $139 in recent days. That values Microsoft at just over 27 times expected earnings for the entire next fiscal year.

With Microsoft still sitting on over $130 billion in cash and investments at the end of its most recent quarter, some investors may want it to continue chipping away at that $72.5 billion in long-term debt, while it keeps buying back stock (over $16 billion on buybacks in calendar year 2018 alone).

Microsoft is no longer just about software sales and personal computers. It took years to shed that tie, but the company is in a very different place now that it has the highest market cap of all companies. After a recent cloud win, another huge opportunity is the pending all-or-none JEDI $10 billion cloud deal with the U.S. Department of Defense. It can be argued that Microsoft should be considered the only eligible company to handle the deal from a security aspect, but this is a government contract and those outcomes can in some instances be harder to predict.

In terms of Wall Street’s strong expectations, in July and June alone, Wells Fargo raised its target to $160 from $145, Cowen started coverage with a $150 target, Credit Suisse assigned a $145 target and Deutsche Bank raised its target to $155 from $145. In the past 48 hours, Nomura/Instinet raised its target price to $161 from $131.

Credit Suisse issued a preview on Wednesday, with an Outperform rating and a $145 price target. It is expecting that Microsoft will report solid earnings as it continues to execute against its vast opportunities. The firm’s recent CIO survey also showed that 64% of chief intelligence officers expect to spend more of their IT budgets on Microsoft in calendar 2019 than they had initially budgeted. One issue that Credit Suisse did warn about is that Microsoft is entering a period when it has increasingly difficult comparisons of prior strength through the end of this calendar year. The firm sees Microsoft’s fiscal year 2020 guidance to be in line with its preliminary views of double-digit revenue and operating income growth with stable margins.

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Wedbush Securities issued a note on Monday calling for Microsoft to post a solid beat on both the top and bottom lines, as cloud strength on Azure and Office 365 continue to be the fuel in the tank. The firm sees Microsoft beating commercial cloud expectations by 3% or more. Azure’s cloud momentum also was said to still be in its early days of playing out, Office 365 is providing growth tailwinds for the next 12 to 18 months at least and product initiatives are still playing out within its base of consumers and enterprises. Wedbush has an Outperform rating and a $155 price target.

Merrill Lynch recently maintained its $155 price objective on Microsoft, and in May it suggested that Azure could rise to nearly an $80 billion opportunity for Microsoft by 2025 (up from about $10 billion currently). It sees LinkedIn adding up to $7 billion or $8 billion in annual revenues by 2025 as well, considering its marketing solution. While Microsoft is expected to have its critical Xbox game consoles coming by 2020 to sustain the gaming community and developer interest, the firm views Xbox as becoming a less relevant growth driver for the next three to five years. All in all, Microsoft is shown to have a total addressable market of $500 billion in 2025 from five key growth engines and is only about 9% penetrated so far.

CFRA has a Hold rating and only a $130 price target. While that may sound cautious, CFRA outlined that gross margins should be around 65% through fiscal year 2021, after having fallen to 62% as it invested heavily into and was ramping up toward devices and the cloud. CFRA believes that its gross margin likely bottomed out in 2016 and EBITDA margins should widen out through fiscal year 2021. CFRA also sees notable share repurchases and dividend increases continuing ahead.

When firm Argus reiterated its Buy rating and raised its target to $145 after the prior earnings report, the independent research firm raised its fiscal year 2019 earnings forecast to $4.58 from $4.39 per share and raised its 2020 fiscal EPS up to $5.01 from $4.70.

It seems unlikely that short sellers are able to make much of a dent in a $1 trillion company, and the 48 million shares short at the last short interest reporting date is far less than 1% of its float and represents about two days to cover.

If there is any weakness after earnings, the 20-day moving average is right around current levels at $136.29, and the 50-day moving average is down at $131.29. On a much longer-term basis, and evident of the strong gains seen in 2019 and before, the stock’s 200-day moving average is all the way down at $115.32.

Microsoft shares had been trading back down closer to $136 on Thursday ahead of the afternoon’s earnings report, in a 52-week trading range of $93.63 to $139.54. Its consensus price target from Refinitiv previously was $144.25, but the updated target is $147.47.