Microsoft (NASDAQ:MSFT) Stock Rating Upgraded by Melius Research

Microsoft (NASDAQ:MSFT) was upgraded by equities researchers at Melius Research from a “hold” rating to a “buy” rating in a research note issued to investors on Monday, Marketbeat Ratings reports. The brokerage currently has a $665.00 price target on the software giant’s stock. Melius Research’s target price suggests a potential upside of 25.64% from the company’s current price.

MSFT has been the subject of several other research reports. Stifel Nicolaus raised shares of Microsoft from a “hold” rating to a “buy” rating and boosted their target price for the company from $530.00 to $575.00 in a research note on Tuesday, September 22nd. Guggenheim reaffirmed a “buy” rating and set a $586.00 price target on shares of Microsoft in a research note on Monday, July 27th. Benchmark reiterated a “buy” rating on shares of Microsoft in a report on Friday, July 24th. KeyCorp reissued an “overweight” rating on shares of Microsoft in a research report on Thursday, September 3rd. Finally, BMO Capital Markets began coverage on shares of Microsoft in a research note on Monday. They set an “outperform” rating on the stock. Forty-one investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $578.73.

Microsoft Trading Up 0.8%

Shares of Microsoft stock opened at $529.30 on Monday. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. Microsoft has a 1 year low of $349.20 and a 1 year high of $553.72. The company has a market capitalization of $3.93 trillion, a P/E ratio of 29.47, a P/E/G ratio of 1.69 and a beta of 1.10. The business has a 50 day moving average price of $495.52 and a 200 day moving average price of $432.04.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The firm had revenue of $90.01 billion for the quarter, compared to analysts’ expectations of $87.62 billion. During the same quarter in the prior year, the firm earned $3.65 EPS. Microsoft’s quarterly revenue was up 17.7% on a year-over-year basis. Sell-side analysts anticipate that Microsoft will post 19.62 EPS for the current fiscal year.

Insider Activity at Microsoft

In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the transaction, the chief executive officer owned 100,447 shares of the company’s stock, valued at $49,007,086.83. This trade represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the transaction, the executive vice president owned 42,677 shares in the company, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 143,009 shares of company stock valued at $71,420,699 over the last three months. Insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the company. Stewardship Concepts Financial Services LLC boosted its holdings in Microsoft by 4.6% in the third quarter. Stewardship Concepts Financial Services LLC now owns 1,993 shares of the software giant’s stock valued at $1,022,000 after acquiring an additional 87 shares during the last quarter. Mallini Complete Financial Planning LLC acquired a new stake in Microsoft during the third quarter worth about $533,000. RVW Wealth LLC raised its holdings in shares of Microsoft by 98.4% in the 3rd quarter. RVW Wealth LLC now owns 8,079 shares of the software giant’s stock worth $4,144,000 after purchasing an additional 4,006 shares during the period. Boyum Wealth Architects LLC raised its holdings in shares of Microsoft by 2.2% in the 3rd quarter. Boyum Wealth Architects LLC now owns 2,015 shares of the software giant’s stock worth $1,043,000 after purchasing an additional 43 shares during the period. Finally, Paladin Partners LLC lifted its stake in shares of Microsoft by 8.6% in the 3rd quarter. Paladin Partners LLC now owns 3,961 shares of the software giant’s stock valued at $2,032,000 after purchasing an additional 313 shares in the last quarter. 71.13% of the stock is owned by hedge funds and other institutional investors.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Analyst upgrade and higher price target: Melius Research upgraded Microsoft from “Hold” to “Buy” and set a $665 target, arguing that corporate concerns about AI safety, governance and security could increase demand for Microsoft’s enterprise tools. BNP Paribas also reportedly raised its forecast to $604, citing Azure growth, Copilot consumption-based pricing and the integration of OpenAI-related revenue. Melius Research upgrades Microsoft
• Positive Sentiment: AI and cloud momentum remain the core catalyst: Investors continue to focus on strong Azure demand, expanding AI infrastructure requirements and Copilot adoption. Microsoft is increasingly viewed as a relatively dependable enterprise AI leader, with its installed base, cloud platform and security products potentially giving it an advantage as businesses seek trusted AI solutions. Microsoft viewed as an AI leader
• Positive Sentiment: Upcoming Windows and Surface event: Microsoft’s October 7 event will highlight on-device AI and could provide updates on Windows, Surface and Copilot monetization. The event is being watched for evidence that AI can reinvigorate the devices business while complementing faster-growing cloud operations. Microsoft Windows and Surface event
• Neutral Sentiment: Internal AI model shift: Microsoft is reportedly steering employees away from Anthropic’s Claude toward internally developed AI models. This could reduce costs and dependence on outside providers, but investors will watch whether Microsoft maintains performance and enterprise customer confidence.
• Negative Sentiment: Risks include valuation, spending and rates: Microsoft’s strong recent rally has increased valuation concerns, while substantial capital expenditures needed for data centers could pressure free cash flow. Rising Treasury yields may also weigh on richly valued AI stocks. Rising Treasury yields and AI stocks
• Negative Sentiment: Isolated selling signals: A member of Congress disclosed a sale of Microsoft shares ahead of earnings season. The trade is a limited sentiment indicator rather than a fundamental development, but it may attract attention after reports that Microsoft insiders have sold shares without reported purchases in recent months. Congressman sells Microsoft stock

About Microsoft

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.