3,113,553 Shares in Microsoft Corporation $MSFT Bought by Generation Investment Management LLP

Key Points

• Generation Investment Management acquired 3.11 million Microsoft shares worth approximately $1.16 billion, making MSFT its third-largest portfolio holding at 11.3%. Institutional investors collectively own 71.13% of the stock.
• Microsoft reported stronger-than-expected quarterly results, with revenue up 17.7% year over year and EPS of $4.74 versus the $4.24 consensus estimate. Shares were trading near $535, with the company approaching a $4 trillion market capitalization and analysts maintaining a “Moderate Buy” consensus.
• Microsoft raised its quarterly dividend to $0.98 per share, while investors continue to monitor AI growth and potential risks including a suspended green-card sponsorship program, gaming-related antitrust scrutiny and recent insider stock sales.

Generation Investment Management LLP purchased a new position in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) in the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm purchased 3,113,553 shares of the software giant's stock, valued at approximately $1,161,418,000. Microsoft makes up 11.3% of Generation Investment Management LLP's portfolio, making the stock its 3rd biggest position.

A number of other hedge funds and other institutional investors also recently made changes to their positions in MSFT. Flossbach Von Storch SE acquired a new stake in shares of Microsoft in the 2nd quarter valued at approximately $1,266,394,000. Patrick Mauro Investment Advisor INC. bought a new position in shares of Microsoft in the second quarter valued at $11,302,000. Dala Group LLC bought a new position in shares of Microsoft in the second quarter valued at $1,776,000. Smith Partners Wealth Management LLC acquired a new position in Microsoft during the second quarter worth $1,423,000. Finally, Freedom Investment Management Inc. acquired a new position in shares of Microsoft during the 2nd quarter worth about $313,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft introduced Microsoft-Decision-1, an AI model it says makes decisions substantially faster than GPT-6 Sol. The launch reinforces Microsoft’s competitive position in enterprise AI and could support demand for Azure and Copilot services. Microsoft launches Microsoft-Decision-1
• Positive Sentiment: Analyst and investor commentary remains bullish on Microsoft’s AI stack, Azure acceleration, Copilot adoption and a large reported backlog. Wells Fargo reportedly raised its price target to $725, while Morgan Stanley reaffirmed a Buy rating with a $600 target. Morgan Stanley rating
• Positive Sentiment: Microsoft is attempting to revive Windows and expand on-device AI with new Nvidia-powered Surface hardware, including the premium Surface Laptop Ultra. Local AI processing could strengthen the Windows ecosystem and stimulate higher-value PC sales. Surface Laptop Ultra
• Positive Sentiment: The company is nearing a $4 trillion market capitalization after a strong earnings beat, with revenue and earnings growth continuing to support the recent rally. The next major test is Microsoft’s expected October 28 earnings report. Microsoft approaches $4 trillion valuation
• Neutral Sentiment: Microsoft’s new Xbox division, focused on film, television, events and theme parks, could expand the reach of its gaming franchises, although the strategy is unlikely to materially affect near-term financial results. Microsoft forms new Xbox unit
• Negative Sentiment: The U.S. suspension of Microsoft’s PERM green-card sponsorship program creates hiring and retention uncertainty, particularly for specialized AI and engineering workers. Investors are weighing potential compliance costs and the risk of an “AI brain drain.” U.S. suspends Microsoft green-card program
• Negative Sentiment: Italy launched an EU-backed antitrust investigation into Microsoft-owned game companies over virtual currencies, adding regulatory risk to the gaming business. Italy gaming investigation

Microsoft Stock Up 2.4%

Microsoft stock opened at $535.07 on Friday. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. Microsoft Corporation has a 12-month low of $349.20 and a 12-month high of $553.72. The firm's fifty day moving average is $501.15 and its 200 day moving average is $434.73. The company has a market capitalization of $3.97 trillion, a PE ratio of 29.79, a PEG ratio of 1.72 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued 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. The business had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%. The firm's revenue was up 17.7% compared to the same quarter last year. During the same period in the previous year, the company posted $3.65 EPS. As a group, sell-side analysts predict that Microsoft Corporation will post 19.65 EPS for the current fiscal year.

Microsoft Increases Dividend

The business 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 dividend of $0.98 per share. This represents a $3.92 annualized dividend and a yield of 0.7%. This is an increase from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date is Thursday, November 19th. Microsoft's dividend payout ratio is currently 20.27%.

Insider Buying and Selling

In other news, EVP Amy Hood sold 41,674 shares of the firm's stock in a transaction 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 completion of the sale, 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 sale was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Judson Althoff sold 10,000 shares of Microsoft stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the completion of the sale, the chief executive officer directly owned 100,447 shares in the company, valued at approximately $49,007,086.83. This represents a 9.05% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders have sold 143,009 shares of company stock worth $71,420,699. 0.03% of the stock is owned by corporate insiders.

Analyst Upgrades and Downgrades

Several equities research analysts recently issued reports on the stock. Oppenheimer raised their target price on shares of Microsoft from $515.00 to $570.00 and gave the company an "outperform" rating in a research note on Tuesday, September 22nd. Wells Fargo & Company lifted their price target on Microsoft from $700.00 to $725.00 and gave the stock an "overweight" rating in a report on Thursday, October 1st. Benchmark reissued a "buy" rating on shares of Microsoft in a research report on Friday, July 24th. Rothschild & Co Redburn set a $440.00 price target on Microsoft in a research report on Monday, September 21st. Finally, Jefferies Financial Group assumed coverage on Microsoft in a research note on Monday, October 5th. They issued a "buy" rating on the stock. Forty-two research analysts have rated the stock with a Buy rating, four have given a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $578.73.

Microsoft Company Profile

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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