Erste Group Bank Forecasts Higher Earnings for Microsoft

Key Points

• Erste Group Bank raised Microsoft’s FY2027 EPS forecast to $19.54 from $19.46 and initiated a FY2028 estimate of $23.32, broadly in line with the $19.58 consensus for the current fiscal year.
• Microsoft’s latest quarter exceeded expectations, with EPS of $4.74 versus $4.24 expected and revenue of $90.01 billion versus $87.62 billion. Revenue increased 17.7% year over year, while net margin reached 40.31%.
• Analyst sentiment remains favorable, with 42 Buy ratings and five Holds producing a “Moderate Buy” consensus and an average price target of $558.87; however, rising AI infrastructure costs, customer concentration and recent insider selling remain risks.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Equities researchers at Erste Group Bank boosted their FY2027 earnings estimates for shares of Microsoft in a research report issued on Wednesday, August 5th. Erste Group Bank analyst H. Engel now forecasts that the software giant will earn $19.54 per share for the year, up from their prior estimate of $19.46. The consensus estimate for Microsoft's current full-year earnings is $19.58 per share. Erste Group Bank also issued estimates for Microsoft's FY2028 earnings at $23.32 EPS.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, beating analysts' consensus estimates 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 analysts' expectations of $87.62 billion. During the same period last year, the firm posted $3.65 earnings per share. The firm's quarterly revenue was up 17.7% compared to the same quarter last year.

Other analysts also recently issued reports about the company. Stifel Nicolaus upped their price objective on Microsoft from $400.00 to $450.00 and gave the stock a "hold" rating in a research report on Thursday, July 30th. UBS Group set a $525.00 target price on shares of Microsoft in a report on Thursday, July 30th. Tigress Financial raised their price target on shares of Microsoft from $680.00 to $690.00 and gave the company a "buy" rating in a research note on Wednesday. Wedbush reaffirmed an "outperform" rating and set a $575.00 price target on shares of Microsoft in a report on Wednesday, May 13th. Finally, Benchmark reiterated a "buy" rating on shares of Microsoft in a research report on Friday, July 24th. Forty-two equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $558.87.

Microsoft Stock Performance

Shares of MSFT opened at $499.99 on Monday. Microsoft has a 52-week low of $349.20 and a 52-week high of $553.72. The business's fifty day moving average is $404.86 and its 200-day moving average is $406.59. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The firm has a market cap of $3.71 trillion, a price-to-earnings ratio of 27.84, a PEG ratio of 1.61 and a beta of 1.10.

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft's dividend payout ratio (DPR) is 20.27%.

Insider Transactions at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 4,810 shares of the stock in a transaction that occurred 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 sale, the executive vice president owned 42,677 shares of the company's stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the company's stock in a transaction on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares in the company, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 38,572 shares of company stock worth $17,775,330 over the last ninety days. 0.03% of the stock is owned by insiders.

Hedge Funds Weigh In On Microsoft

Several hedge funds and other institutional investors have recently bought and sold shares of MSFT. Norges Bank acquired a new stake in Microsoft during the fourth quarter worth approximately $50,664,631,000. Auto Owners Insurance Co raised its holdings in Microsoft by 56,160.8% during the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock worth $29,073,486,000 after buying an additional 60,009,531 shares during the last quarter. Nuveen LLC acquired a new stake in shares of Microsoft in the 1st quarter worth about $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in shares of Microsoft by 500.0% in the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant's stock valued at $30,840,432,000 after purchasing an additional 49,618,571 shares in the last quarter. Finally, Laurel Wealth Advisors LLC lifted its holdings in shares of Microsoft by 49,640.3% in the second quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant's stock valued at $14,905,904,000 after purchasing an additional 29,906,791 shares in the last quarter. Institutional investors and hedge funds own 71.13% of the company's stock.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Citi raised its Microsoft price target to $600. The upgrade follows Microsoft’s quarterly Azure performance, with analysts highlighting the 43% cloud-revenue increase and stronger-than-expected earnings as evidence that AI demand is translating into accelerating cloud growth. Citi Raises Microsoft Stock Target to $600
• Positive Sentiment: Microsoft’s custom AI chips may improve cloud economics. CEO Satya Nadella said the company’s internally developed chips can deliver efficiency gains of up to 40%. Better cost and energy efficiency could help Microsoft support AI workloads while protecting Azure margins. Microsoft Custom AI Chips Improve Efficiency
• Positive Sentiment: Azure is expanding in India. Microsoft opened a major Hyderabad data-center region and is committing approximately $20.5 billion to its Indian cloud and AI operations. Early customers include Adani Group and HDFC Bank, supporting the case for long-term international Azure growth. Microsoft Opens Largest India Data Center Hub
• Positive Sentiment: Fundamentals and institutional support remain strong. Microsoft recently exceeded quarterly revenue and EPS expectations, while Bill Ackman’s Pershing Square holds a reported $2.4 billion MSFT position. Scotiabank also raised its fiscal 2027 EPS estimate and maintained an Outperform rating. Bill Ackman Microsoft Stake
• Neutral Sentiment: AI demand is powerful but concentrated. Reports suggest OpenAI may account for a substantial portion of Microsoft’s AI sales, creating both a major growth engine and customer-concentration risk. Microsoft’s large AI backlog also does not guarantee equivalent future profitability.
• Negative Sentiment: Spending, margins and valuation remain concerns. Rising data-center capital expenditures and lower cloud gross margins could pressure cash flow if AI infrastructure costs grow faster than revenue. After the sharp post-earnings rally, the stock is also more vulnerable to profit-taking or disappointing guidance.
• Negative Sentiment: Insider sales and securities litigation add headline risk. CEO Judson Althoff sold 10,000 shares for roughly $4.9 million, and multiple law firms are publicizing a securities class action with an August 11 lead-plaintiff deadline. These developments do not establish wrongdoing but may weigh on near-term sentiment.

About Microsoft

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft's product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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