Microsoft (NASDAQ:MSFT) Shares Up 1.1% – Still a Buy?

Microsoft Corporation (NASDAQ:MSFT)’s stock price traded up 1.1% on Monday. The stock traded as high as $542.74 and last traded at $541.15. Approximately 18,028,736 shares traded hands during mid-day trading, a decline of 47% from the average daily volume of 34,268,449 shares. The stock had previously closed at $535.07.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Maia 300 strengthens Microsoft’s AI infrastructure strategy. Microsoft introduced its largest in-house AI chip rollout, with plans for multi-gigawatt deployment across Azure data centers. The chip could improve inference economics, reduce reliance on Nvidia and AMD, and provide greater control over AI capacity and margins. What Could Microsoft Gain From Its Maia 300 AI Chip Rollout?
• Positive Sentiment: Large data-center commitments point to sustained Azure and AI demand. Reports that Microsoft signed more than $130 billion in data-center leases highlight the scale of expected AI workloads and could support long-term Azure growth, although the commitments also increase near-term capital requirements. Microsoft Reports $130 Billion in Data Center Leases
• Positive Sentiment: Analyst sentiment remains broadly constructive. Barclays raised its Microsoft price target to $600 from $512, citing the potential for stronger differentiation in software and upcoming fiscal first-quarter results. Microsoft Price Target Raised by Barclays
• Neutral Sentiment: Microsoft is reportedly seeking at least 20% cost reductions in Azure. The effort could improve efficiency and offset AI infrastructure expenses, but it also suggests management is under pressure to control rapidly rising costs. Microsoft Weighs 20% Cost Cuts in Azure
• Negative Sentiment: Hot inflation data renewed fears of higher interest rates. AI shares broadly sold off, wiping out roughly $80 billion in market value. Higher borrowing costs are particularly concerning for less-profitable AI companies and are weighing on investor risk appetite, even though Microsoft is viewed as financially stronger than many peers. AI Shares Tumble as Inflation Fuels Rate Fears
• Negative Sentiment: Security concerns and analyst downgrades added pressure. Microsoft issued patches for a large number of vulnerabilities, while Phillip Securities cut its rating from “moderate buy” to “hold.” These developments reinforce near-term caution after the stock’s strong run.

Analysts Set New Price Targets

Several analysts have weighed in on MSFT shares. Cantor Fitzgerald lifted their price objective on Microsoft from $522.00 to $608.00 and gave the company an “overweight” rating in a research report on Monday, September 21st. Morgan Stanley cut shares of Microsoft from an “overweight” rating to a “negative” rating in a report on Monday, October 5th. Truist Financial reissued a “buy” rating and set a $575.00 price target on shares of Microsoft in a research report on Wednesday, July 22nd. DA Davidson restated a “buy” rating and issued a $550.00 price objective on shares of Microsoft in a report on Thursday, July 30th. Finally, Mizuho lowered their price objective on Microsoft from $515.00 to $490.00 and set an “outperform” rating for the company in a research note on Wednesday, July 15th. Forty-one analysts have rated the stock with a Buy rating, five have given a Hold rating and two have assigned a Sell rating to the company’s stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $581.80.

Microsoft Stock Performance

The company has a market cap of $3.96 trillion, a PE ratio of 29.71, a P/E/G ratio of 1.74 and a beta of 1.10. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The business’s fifty day moving average is $503.23 and its 200-day moving average is $437.50.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. The business had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%. The business’s quarterly revenue was up 17.7% on a year-over-year basis. During the same quarter in the prior year, the business posted $3.65 earnings per share. As a group, research analysts predict that Microsoft Corporation will post 19.65 EPS for the current fiscal year.

Microsoft Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be given a $0.98 dividend. This is an increase from Microsoft’s previous quarterly dividend of $0.91. This represents a $3.92 annualized dividend and a yield of 0.7%. The ex-dividend date is Thursday, November 19th. Microsoft’s dividend payout ratio (DPR) is 20.27%.

Insider Buying and Selling

In other news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total value of $4,878,900.00. Following the sale, the chief executive officer owned 100,447 shares of the company’s stock, valued at approximately $49,007,086.83. This represents a 9.05% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Amy Hood sold 41,674 shares of the stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $498.27, for a total transaction of $20,764,903.98. Following the completion of the sale, the executive vice president directly owned 533,624 shares in the company, valued at $265,888,830.48. This trade represents a 7.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 143,009 shares of company stock worth $71,420,699. 0.03% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Microsoft

Several large investors have recently modified their holdings of the business. Empirical Financial Services LLC d.b.a. Empirical Wealth Management grew its stake in shares of Microsoft by 4.0% in the second quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management now owns 229,490 shares of the software giant’s stock valued at $85,604,000 after buying an additional 8,773 shares in the last quarter. Markel Group Inc. lifted its stake in Microsoft by 0.4% in the 1st quarter. Markel Group Inc. now owns 537,630 shares of the software giant’s stock valued at $199,014,000 after purchasing an additional 1,950 shares during the last quarter. Bessemer Group Inc. grew its holdings in Microsoft by 8.4% during the first quarter. Bessemer Group Inc. now owns 6,921,677 shares of the software giant’s stock worth $2,562,197,000 after purchasing an additional 537,634 shares during the period. Taylor Securities Services Inc. acquired a new stake in shares of Microsoft in the fourth quarter valued at approximately $2,616,000. Finally, Harel Insurance Investments & Financial Services Ltd. increased its holdings in shares of Microsoft by 138.8% during the 1st quarter. Harel Insurance Investments & Financial Services Ltd. now owns 1,356,359 shares of the software giant’s stock worth $502,077,000 after acquiring an additional 788,297 shares during the last quarter. Institutional investors own 71.13% of the company’s stock.

Microsoft Company Profile

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft’s productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.