Microsoft (NASDAQ:MSFT) Shares Up 3% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) shares shot up 3% on Wednesday . The company traded as high as $388.83 and last traded at $384.28. Approximately 46,814,788 shares traded hands during mid-day trading, an increase of 23% from the average daily volume of 37,974,023 shares. The stock had previously closed at $373.02.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft launched a $2.5 billion AI deployment business, Frontier Company, to help enterprise customers implement AI with 6,000 specialists embedded in client operations. Microsoft launches firm to help companies adopt AI with $2.5 billion
• Positive Sentiment: Microsoft’s AI and cloud leadership is being reinforced by reports that Azure is widening its lead over AWS in CIO surveys and by additional enterprise partnerships such as Haleon’s expanded five-year Microsoft AI deal. Microsoft (MSFT) Azure Widens Lead over AWS in Jefferies CIO Survey
• Positive Sentiment: Analysts and market commentary continue to frame Microsoft as an attractive long-term AI beneficiary, with some pieces arguing the stock’s pullback has created an opportunity. Is Microsoft Stock Heading For $550?
• Neutral Sentiment: Microsoft is also being linked to a new undersea cable project with Singapore’s Lightstorm to strengthen India-Southeast Asia connectivity, which supports long-term infrastructure expansion but is not likely a near-term earnings driver. Microsoft partners with Singapore’s Lightstorm to build India-Southeast Asia undersea cable
• Neutral Sentiment: Coverage ahead of Microsoft’s upcoming earnings report suggests investors are watching whether AI spending is translating into stronger revenue and profits. Microsoft Corporation’s Quarterly Earnings Preview: What You Need to Know
• Negative Sentiment: Reports of another layoff round, potentially affecting thousands of employees, are feeding concerns that Microsoft is cutting costs while absorbing very large AI-related spending. Microsoft eyes another wave of layoffs that could hit 5,000 workers next week
• Negative Sentiment: Microsoft is also facing fresh securities-fraud class-action publicity, which adds headline risk even if the claims are still in the legal process. Microsoft Corporation (MSFT) Shareholders Who Lost Money Have Opportunity to Lead Securities Fraud Lawsuit

Analyst Ratings Changes

Several equities research analysts have recently weighed in on MSFT shares. Robert W. Baird decreased their price objective on Microsoft from $540.00 to $500.00 and set an “outperform” rating for the company in a report on Wednesday, April 15th. The Goldman Sachs Group reissued a “buy” rating on shares of Microsoft in a report on Thursday, April 30th. Raymond James Financial cut Microsoft from a “market perform” rating to a “market perform” rating in a research note on Tuesday, May 5th. China Renaissance lowered their price objective on shares of Microsoft from $630.00 to $550.00 and set a “buy” rating on the stock in a research report on Monday, May 4th. Finally, BMO Capital Markets cut their price objective on shares of Microsoft from $575.00 to $505.00 and set an “outperform” rating for the company in a research report on Tuesday, April 28th. Forty-one research analysts have rated the stock with a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat.com, Microsoft presently has a consensus rating of “Moderate Buy” and a consensus target price of $560.86.

Microsoft Price Performance

The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The firm’s 50-day simple moving average is $406.99 and its two-hundred day simple moving average is $418.05. The company has a market capitalization of $2.90 trillion, a price-to-earnings ratio of 23.24, a price-to-earnings-growth ratio of 1.20 and a beta of 1.13.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $82.89 billion during the quarter, compared to the consensus estimate of $81.44 billion. During the same period last year, the firm earned $3.46 EPS. The company’s revenue for the quarter was up 18.3% on a year-over-year basis. Sell-side analysts predict that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be issued a $0.91 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 annualized dividend and a yield of 0.9%. Microsoft’s dividend payout ratio is 21.67%.

Insider Activity

In related news, EVP Amy Coleman sold 1,262 shares of the stock in a transaction dated Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the sale, the executive vice president directly owned 46,003 shares of the company’s stock, valued at approximately $18,922,874.02. This represents a 2.67% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares in the company, valued at approximately $50,928,792.23. The trade was a 12.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 23,762 shares of company stock worth $10,508,361 over the last 90 days. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Longfellow Investment Management Co. LLC raised its holdings in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after acquiring an additional 20 shares during the last quarter. Bernzott Capital Advisors acquired a new stake in shares of Microsoft during the fourth quarter valued at $34,000. Timmons Wealth Management LLC purchased a new stake in Microsoft during the 4th quarter worth about $36,000. Fairway Wealth LLC increased its position in Microsoft by 287.0% during the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after purchasing an additional 66 shares in the last quarter. Finally, LSV Asset Management acquired a new position in Microsoft in the 4th quarter valued at about $44,000. Institutional investors and hedge funds own 71.13% of the company’s stock.

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).