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

Key Points

• Melius Research upgraded Microsoft from “hold” to “strong buy,” citing demand for its security, governance and compliance offerings and Azure’s position in the AI market. The firm reportedly raised its price target to $665.
• Microsoft shares rose 1.5% to $525.18, while analysts maintain an overall “moderate buy” consensus with an average target price of $578.73. The company recently beat quarterly expectations, reporting $4.74 in EPS and $90.01 billion in revenue, up 17.7% year over year.
• Insiders sold approximately $71.4 million of Microsoft stock over the past 90 days, including sales by CEO Satya Nadella and EVP Amy Hood under pre-arranged trading plans. Institutional investors continue to hold a substantial 71.13% of the shares.

Microsoft (NASDAQ:MSFT - Get Free Report) was upgraded by investment analysts at Melius Research from a "hold" rating to a "strong-buy" rating in a research report issued to clients and investors on Monday, Zacks reports.

MSFT has been the topic of several other reports. Raymond James Financial cut shares of Microsoft from a "moderate buy" rating to a "strong sell" rating in a report on Wednesday, September 23rd. Rothschild & Co Redburn set a $440.00 price objective on Microsoft in a research note on Monday, September 21st. Morgan Stanley cut Microsoft from an "overweight" rating to a "negative" rating in a report on Monday. Jefferies Financial Group began coverage on Microsoft in a research report on Monday. They set a "buy" rating for the company. Finally, UBS Group lowered Microsoft from a "buy" rating to a "market perform" rating in a report on Monday. One equities research analyst has rated the stock with a Strong Buy rating, forty have given a Buy rating, five have assigned a Hold rating and two have given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $578.73.

Microsoft Stock Up 1.5%

MSFT opened at $525.18 on Monday. The stock has a fifty day moving average of $492.81 and a 200-day moving average of $431.07. The company has a market capitalization of $3.90 trillion, a P/E ratio of 29.24, a P/E/G ratio of 1.66 and a beta of 1.10. Microsoft has a fifty-two week low of $349.20 and a fifty-two week high of $553.72. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23.

Microsoft (NASDAQ:MSFT - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The business had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. During the same period in the prior year, the company posted $3.65 earnings per share. Microsoft's revenue was up 17.7% compared to the same quarter last year. On average, equities analysts expect that Microsoft will post 19.62 EPS for the current year.

Insiders Place Their Bets

In other Microsoft news, CEO Satya Nadella sold 86,525 shares of the business's 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 completion of the transaction, the chief executive officer owned 486,763 shares of the company's stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The sale 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, 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 transaction, the executive vice president directly owned 533,624 shares of the company's stock, valued at $265,888,830.48. This trade represents a 7.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 143,009 shares of company stock worth $71,420,699 over the last 90 days. Corporate insiders own 0.03% of the company's stock.

Institutional Investors Weigh In On Microsoft

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Box Hill Private Wealth LLC boosted its position in Microsoft by 3.2% in the third quarter. Box Hill Private Wealth LLC now owns 4,409 shares of the software giant's stock valued at $2,261,000 after buying an additional 137 shares in the last quarter. Horizons Wealth Management bought a new stake in Microsoft during the 3rd quarter worth $228,000. Baker Tilly Wealth Management LLC increased its holdings in Microsoft by 2.2% in the 3rd quarter. Baker Tilly Wealth Management LLC now owns 21,586 shares of the software giant's stock worth $11,071,000 after purchasing an additional 466 shares in the last quarter. Ferguson Wellman Capital Management Inc. increased its holdings in Microsoft by 3.7% in the 3rd quarter. Ferguson Wellman Capital Management Inc. now owns 969,392 shares of the software giant's stock worth $497,201,000 after purchasing an additional 34,656 shares in the last quarter. Finally, CapWealth Advisors LLC raised its position in Microsoft by 1.7% in the third quarter. CapWealth Advisors LLC now owns 84,108 shares of the software giant's stock valued at $43,139,000 after purchasing an additional 1,380 shares during the last quarter. 71.13% of the stock is owned by institutional investors.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Melius Research upgraded Microsoft to Buy from Hold and raised its price target to $665. The firm said rising corporate concerns about AI risks could increase demand for Microsoft’s security, governance and compliance products, while positioning Azure as a relatively dependable way to participate in the AI trend. Microsoft stock rises as Melius upgrades to Buy
• Positive Sentiment: Broad market strength also supported MSFT. The Nasdaq reached a record as megacap technology stocks rallied on optimism about earnings growth, with Microsoft among the sector leaders. Expectations for strong technology-sector profits continue to support investor appetite for the shares. Nasdaq hits record as megacap gains offset elevated Treasury yields
• Positive Sentiment: Microsoft continues expanding Copilot’s enterprise usefulness. Wood Mackenzie connected its proprietary energy data and analytics to Microsoft Copilot through a new Model Context Protocol connector, providing another example of specialized business content being integrated into Microsoft’s AI ecosystem. Wood Mackenzie connects energy intelligence with Microsoft Copilot
• Positive Sentiment: Upcoming Xbox and Xbox Game Pass releases provided a smaller consumer-business catalyst. New game launches may support engagement and subscription activity, although the impact is likely less significant than Azure and AI developments. Microsoft stock rises ahead of new Xbox game releases
• Neutral Sentiment: Microsoft and Meta reportedly encouraged employees to reduce their use of Anthropic’s Claude in favor of internal AI tools. The move could lower Microsoft’s external AI expenses and strengthen Copilot adoption, but it also indicates ongoing competition and uncertainty over which AI models will deliver the best economics. Microsoft and Meta steer staff from Anthropic Claude to in-house AI
• Negative Sentiment: Amazon hired longtime Microsoft AI executive Pedram Rezaei, formerly associated with Copilot. The departure could raise concerns about retaining senior AI talent as cloud and software rivals intensify their competition. Amazon hires a Microsoft AI leader
• Negative Sentiment: Investors remain focused on execution risks. Microsoft’s large backlog offers revenue visibility, but the timing of recognition, infrastructure spending and cash conversion could limit near-term benefits. Questions also remain about whether Copilot can become a breakout AI application. How much revenue visibility does Microsoft’s backlog provide?

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.

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