SAN FRANCISCO -- While the successful launch of its Halo 3 video game has grabbed headlines, news of strong global third-quarter PC sales has raised expectations for Microsoft's ( MSFT) first-quarter earnings report late Thursday. The stock has climbed to $31.25, a gain of about 10%, since Sept. 20, when it had spent more than a month languishing below $30. Initial sales reports on Halo helped push it past that threshold, and the stock rose even further last week after PC sales data came out. Analysts expect Microsoft to post revenue of $12.57 billion, which would be 16% above last year's top line of $10.81 billion, according to Thomson Financial. The company is expected to earn 39 cents a share, excluding items. "There should be upside because PC growth was much higher than expected," says Sanil Daptardar, equity analyst at Sentinel Investments, which held 1.2 million shares of Microsoft at the end of June. "From a valuation and cash-flow perspective, the stock is a good buy," Daptardar says Tuesday. "They are having overall a solid quarter," says Chuck Jones, senior vice president at Atlantic Trust Private Wealth Management, which holds Microsoft shares. According to Gartner, third-quarter global PC shipments, a good indicator of operating system sales, grew 14.4%, although U.S. shipment growth was slower than expected, at 4.7%.