Microsoft ( MSFT) may be guarded about its near-term prospects, but that doesn't mean Wall Street has to be.

In its fiscal first-quarter report Thursday, the software behemoth cautioned analysts that second-quarter results will likely come in below expectations. And despite a massive stock-buyback program -- which theoretically should boost earnings per share -- the company declined to ratchet up its full-year profit prediction.

But in reports issued following Microsoft's report, Wall Street analysts were, on the whole, notably more bullish than the company. The consensus view: With a slew of new products launching over the next year, Microsoft's share price -- and results -- are poised for growth.

The company is in a position to benefit from a rally in software stocks, said Credit Suisse First Boston analyst Jason Maynard in his report. Helping Microsoft's cause: The company's earnings outlook is conservative and has built-in upside, thanks to all the new products to come, its buyback program and the company's ability -- demonstrated on Thursday -- to outperform on the bottom line even when revenue may be a bit light, he said.

"Normally, we would not expect shares of low-beta Microsoft to participate in such a rally; however, with depressed near-term expectations, a bias toward upward earnings revisions, and the highly-anticipated Xbox 360 launch, we believe it could buck the trend," said Maynard, who upped his rating on the company's stock from neutral to outperform. Microsoft has been an investment banking client of CSFB in the last year.

Investors seemed caught somewhere in between the company's assessment and analysts' opinions. In recent trading, Microsoft was up 57 cents, or 2%, to $25.42.

Microsoft beat the Street's profit expectations in its just-completed quarter by a penny a share. But the company's sales, which came in at $9.74 billion, fell short of analysts' revenue estimates by about $40 million.

Still, it was the company's outlook that appeared more disappointing. The company guided to earnings of 32 to 33 cents a share in the second, holiday quarter on $11.9 billion to $12 billion in sales. At the midpoints, that outlook was 2.5 cents a share below consensus profit expectations and $340 million below the Street's revenue projection.

Meanwhile, Microsoft essentially left its full-year targets unchanged, saying that it expects to earn $1.26 to $1.30 a share on sales ranging from $43.7 billion to $44.5 billion. The company's decision to stand pat on guidance came despite its decision to push up its share buyback program by 18 months. The company now plans to buy back $19 billion worth of stock by December 2006.

Between now and then, Microsoft plans to refresh many of its major product lines. The company will launch its new video-game console, the Xbox 360, and the next iteration of SQL Server by the end of this year. Next year, the company plans to roll out new versions of Office and Windows.

Those new products should boost revenue and earnings, although analysts differ on how soon they'll provide a lift -- whether it will come this fiscal year or in coming ones. Regardless, most analysts think they will jumpstart Microsoft's stock price as investors anticipate improving results.

"We believe the company's business is going to start to accelerate, and this past quarter marks the inflection point," said Friedman Billings Ramsey analyst David Hilal, whose firm has not done recent investment banking business for Microsoft.

Other analysts, though, think investors will need to show some patience. Microsoft isn't likely to show improved results until next calendar year noted UBS analyst Heather Bellini, thanks in part to the fact that it will be spending significant amounts in the short term on marketing its new products. But the company's likely strong earnings growth next year will improve the outlook for the stock, she said.

"We believe investors will remain frustrated with the stock near-term while it remains in its tight trading range, as it will take at least another quarter to get people to focus on the upcoming product cycles," said Bellini, whose firm has done investment banking for Microsoft in the last year.

Other analysts projected that investors may have to wait a little longer for the company to show earnings upside -- and for the stock to get out of its rut. Susquehanna's Jason Kraft, for instance, lowered his estimates for this quarter and the full year, citing the timing of the company's product launches -- the next iteration of Windows, for instance, isn't expected until late next year -- and the expenses the company will incur as part of those launches.

Still, Kraft reiterated his positive rating on the company's shares.

"While we are optimistic about key product cycles in the next few years, for the time being, we believe upside to estimates could be challenging," said Kraft, whose firm has not done recent investment banking for Microsoft.

But not everyone is excited about the near-term product launches. At least initially, the company will lose money on every Xbox 360 it sells, meaning that the bigger a success the device is in terms of units shipped, the more money the company will lose on it, noted Richard Williams, an analyst with Garban Institutional Equities. The new version of Windows likely won't mean much for the company's top line until at least a year from now, he added. And the company's other products don't appear to be terribly compelling, he said.

Other products that are further away could spur the company's growth, said Williams, whose firm has not done any recent investment banking for Microsoft.

"Until then, however, we believe the stock is only going to get support from its reputation, market size and liquidity and just because it is too big to not own. Near-term growth is not among those attributes that motivate buyers in the stock as far as we can see," he said, reiterating his sell rating.

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