Microsoft ( MSFT) should beat its second-quarter earnings estimates later this month thanks to heavier-than-expected tech spending, brisk Halo 2 sales, and continued strength in the server and business applications markets, an analyst said Tuesday as he raised estimates. J.P. Morgan analyst Adam Holt raised his second-quarter revenue expectations on the company to $10.65 billion from $10.5 billion -- higher than the company's guidance of $10.3 billion to $10.5 billion. In addition, Holt upped his second-quarter earnings by a penny to 34 cents a share -- also higher than the company's guidance of 28 cents a share. (Microsoft's earnings target includes $715 million in stock-based compensation, while analysts typically exclude that charge from their estimates). The consensus estimate on Wall Street gathered by Thomson First Call projects Microsoft to earn 33 cents a share on $10.53 billion in revenue in the second quarter, which ended Dec. 31, Microsoft will report its results on Jan. 27. "We continue to believe that Microsoft should meet or beat Q2 expectations," Holt wrote. He noted the stock is one of his top picks for calendar year 2005 heading into Microsoft's fiscal 2006, which begins this July. Microsoft is slated to deliver more major new products in fiscal 2006 compared with fiscal 2005, including the next version of the Xbox video game console and Office 12. (Holt has an overweight rating on Microsoft; his firm has done investment banking with Microsoft; Holt, a research associate or member of their household holds Microsoft shares). On the enterprise side of Microsoft's business, Holt noted that conversations with chief information officers and the company's software conference pointed to improving software spending in the December quarter, which should benefit Microsoft's Server and Tools division and Office sales as Microsoft benefits from the releases of Sever and Office 2003.