Microsoft (NASDAQ:MSFT) Sets New 1-Year High – Should You Buy?

Microsoft Corporation (NASDAQ:MSFT)’s share price hit a new 52-week high on Wednesday. The stock traded as high as $551.81 and last traded at $555.8510, with a volume of 7,332,986 shares trading hands. The stock had previously closed at $520.99.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s recent earnings beat estimates, and Azure and AI demand remain key growth drivers. That provides a counterweight to concerns about the pace and cost of infrastructure expansion. Article: Why Is Everyone Talking About Microsoft Stock?
• Neutral Sentiment: Microsoft is tightening oversight of data-center partners and reportedly declined to extend Nscale’s Texas capacity deal amid construction delays. Better project discipline could limit execution risk, but investors may also worry that delayed capacity could constrain Azure and AI growth. Article: Microsoft tightens oversight of neocloud data center projects
• Negative Sentiment: Protesters entered a Microsoft data-center site in Amsterdam, adding a potential operational and permitting concern as opposition to data-center construction grows. Article: Protesters enter Microsoft data centre site in Amsterdam
• Negative Sentiment: Microsoft has offered buyouts to about 60,000 employees while investing heavily in AI. The plan could reduce costs, but reports of an already unsettled workforce raise concerns about morale and execution. Article: Microsoft’s Buyout Offer Sets Its Workforce on Edge

Wall Street Analysts Forecast Growth

A number of analysts recently weighed in on MSFT shares. Truist Financial reissued a “buy” rating and issued a $630.00 target price (up from $600.00) on shares of Microsoft in a research note on Thursday, October 29th. Wells Fargo & Company raised their price target on shares of Microsoft from $725.00 to $750.00 and gave the stock an “overweight” rating in a research note on Thursday, October 29th. BNP Paribas Exane downgraded Microsoft from a “strong-buy” rating to a “hold” rating in a report on Monday, October 5th. Stifel Nicolaus lifted their price objective on Microsoft from $575.00 to $650.00 and gave the company a “buy” rating in a report on Thursday, October 29th. Finally, The Goldman Sachs Group reiterated a “buy” rating and issued a $640.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. One investment analyst has rated the stock with a Strong Buy rating, forty-five have issued a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $609.54.

Microsoft Stock Performance

The stock has a 50-day moving average of $516.13 and a 200 day moving average of $439.80. The firm has a market capitalization of $3.98 trillion, a P/E ratio of 27.97, a price-to-earnings-growth ratio of 1.64 and a beta of 1.05. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.21 and a current ratio of 1.22.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings data on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.72 by $0.17. The firm had revenue of $92.28 billion during the quarter, compared to the consensus estimate of $90.62 billion. Microsoft had a return on equity of 31.28% and a net margin of 41.17%. The business’s revenue for the quarter was up 18.8% compared to the same quarter last year. During the same quarter in the previous year, the company posted $4.13 EPS. On average, research analysts anticipate that Microsoft Corporation will post 19.89 earnings per share for the current year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be issued a $0.98 dividend. This is a positive change from Microsoft’s previous quarterly dividend of $0.91. This represents a $3.92 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date of this dividend is Thursday, November 19th. Microsoft’s dividend payout ratio (DPR) is presently 20.46%.

Insider Activity

In related news, EVP Amy Hood sold 41,674 shares of the company’s stock in a transaction dated Monday, September 14th. The shares were sold at an average price of $498.27, for a total transaction of $20,764,903.98. Following the transaction, the executive vice president owned 533,624 shares in the company, valued at $265,888,830.48. This represents a 7.24% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Satya Nadella sold 86,525 shares of the stock in a transaction dated Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the sale, the chief executive officer directly owned 486,763 shares in the company, valued at approximately $244,092,173.98. This represents a 15.09% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 135,504 shares of company stock worth $68,138,024. 0.03% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

A number of large investors have recently modified their holdings of MSFT. Hedeker Wealth LLC increased its position in shares of Microsoft by 6.9% during the second quarter. Hedeker Wealth LLC now owns 55,236 shares of the software giant’s stock valued at $20,604,000 after acquiring an additional 3,546 shares during the last quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management boosted its position in Microsoft by 4.0% during the second quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management now owns 229,490 shares of the software giant’s stock worth $85,604,000 after purchasing an additional 8,773 shares during the period. D.B. Root & Company LLC bought a new stake in Microsoft during the 2nd quarter valued at $3,652,000. Dearborn Partners LLC bought a new stake in shares of Microsoft during the 2nd quarter valued at $75,641,000. Finally, GTS Securities LLC grew its stake in Microsoft by 44.6% during the second quarter. GTS Securities LLC now owns 271,597 shares of the software giant’s stock valued at $101,311,000 after acquiring an additional 83,734 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors and hedge funds.

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices, and digital solutions for consumers, businesses, and public-sector organizations. Founded in 1975 by Bill Gates and Paul Allen, the company is headquartered in Redmond, Washington.

Its products and services include the Windows operating system, Microsoft 365 productivity applications, Azure cloud computing, LinkedIn, GitHub, Surface devices, and Xbox gaming products and services. Microsoft also provides business software, cybersecurity tools, and artificial intelligence technologies.

Microsoft serves customers around the world through its products, online platforms, and network of business partners.