Microsoft (NASDAQ:MSFT) Stock Price Up 2.7% – Still a Buy?

Microsoft Corporation (NASDAQ:MSFT) traded up 2.7% during mid-day trading on Tuesday. The company traded as high as $523.44 and last traded at $520.99. 19,806,943 shares traded hands during mid-day trading, a decline of 41% from the average session volume of 33,412,012 shares. The stock had previously closed at $507.12.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Recent results provide a counterpoint: Microsoft beat quarterly earnings and revenue estimates, while strong Azure demand and AI adoption support growth in its cloud business. MSFT Q1 Earnings Call Highlights Azure Growth and AI Spending
• Neutral Sentiment: Microsoft’s decision not to take up an option to expand Nscale’s Texas data-center capacity appears connected to construction delays and tighter scrutiny of infrastructure partners. It may reflect capital discipline and project execution concerns, rather than a broad retreat from AI investment. Microsoft tightens oversight of neocloud data center projects
• Negative Sentiment: The abandoned expansion has stoked investor concerns about delayed AI capacity coming online and whether heavy data-center investment will generate sufficient cloud returns. Reports of an AI-spending shortfall have also weighed on sentiment toward infrastructure partners and Microsoft’s growth outlook. Why Microsoft Stock is Down Today
• Negative Sentiment: Technology shares sold off broadly late Thursday, adding sector-wide pressure to MSFT. Sector Update: Tech Stocks Tumble Late Afternoon

Analyst Upgrades and Downgrades

A number of research analysts recently weighed in on the stock. The Goldman Sachs Group reaffirmed a “buy” rating and issued a $640.00 target price on shares of Microsoft in a research report on Thursday, July 30th. Weiss Ratings raised shares of Microsoft from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Thursday, October 8th. Wolfe Research raised Microsoft from a “hold” rating to a “strong-buy” rating in a research report on Thursday, October 29th. Citigroup reiterated a “market outperform” rating on shares of Microsoft in a report on Thursday, October 29th. Finally, Royal Bank Of Canada restated an “outperform” rating and issued a $640.00 price target on shares of Microsoft in a research note on Thursday, October 29th. One equities research analyst has rated the stock with a Strong Buy rating, forty-five have assigned a Buy rating and four have given a Hold rating to the company’s stock. According to MarketBeat.com, Microsoft presently has an average rating of “Moderate Buy” and an average price target of $609.54.

Microsoft Stock Down 3.6%

The company has a market capitalization of $3.98 trillion, a price-to-earnings ratio of 27.97, a price-to-earnings-growth ratio of 1.64 and a beta of 1.05. The firm’s 50 day moving average price is $516.13 and its two-hundred day moving average price is $439.80. The company has a current ratio of 1.22, a quick ratio of 1.21 and a debt-to-equity ratio of 0.07.

Microsoft (NASDAQ:MSFT) last issued its earnings results on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.72 by $0.17. Microsoft had a net margin of 41.17% and a return on equity of 31.28%. The company had revenue of $92.28 billion for the quarter, compared to analysts’ expectations of $90.62 billion. During the same period in the prior year, the firm earned $4.13 EPS. Microsoft’s quarterly revenue was up 18.8% compared to the same quarter last year. Sell-side analysts anticipate that Microsoft Corporation will post 19.89 earnings per share for the current fiscal year.

Microsoft Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be given a $0.98 dividend. The ex-dividend date of this dividend is Thursday, November 19th. 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%. Microsoft’s payout ratio is 20.46%.

Insider Activity at Microsoft

In related news, EVP Amy Hood sold 41,674 shares of the business’s stock in a transaction that occurred on 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 transaction, the executive vice president directly owned 533,624 shares of the company’s stock, valued at approximately $265,888,830.48. The trade was a 7.24% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through 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 on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the sale, the chief executive officer owned 486,763 shares in the company, valued at approximately $244,092,173.98. This trade 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. Insiders have sold a total of 135,504 shares of company stock valued at $68,138,024 over the last quarter. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

Large investors have recently modified their holdings of the stock. Montgomery Financial Services LLC acquired a new position in Microsoft in the 2nd quarter valued at $26,000. Frankly Finances LLC acquired a new stake in Microsoft during the 2nd quarter worth $35,000. Bard Associates Inc. acquired a new stake in Microsoft during the 2nd quarter worth $37,000. PMV Capital Advisers LLC acquired a new stake in Microsoft during the 2nd quarter worth $38,000. Finally, Fiduciary Advisors Inc. grew its holdings in shares of Microsoft by 37.4% during the second quarter. Fiduciary Advisors Inc. now owns 125 shares of the software giant’s stock worth $47,000 after buying an additional 34 shares in the last quarter. 71.13% of the stock is owned by institutional investors.

About Microsoft

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company’s principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.