Covington Investment Advisors Inc. Purchases New Shares in Microsoft Corporation $MSFT

Key Points

• Covington Investment Advisors acquired 85,141 Microsoft shares worth approximately $31.8 million, making Microsoft its sixth-largest holding at 4.1% of the portfolio. Institutional investors and hedge funds own 71.13% of Microsoft.
• Microsoft reported quarterly earnings of $4.74 per share on $90.01 billion in revenue, surpassing analyst expectations while revenue rose 17.7% year over year. The company also increased its quarterly dividend to $0.98 per share, a 7.7% increase from $0.91.
• Wall Street remains broadly positive, with 42 buy ratings and a consensus “Moderate Buy” rating alongside a $589.71 target price. However, executives have sold shares recently, and investors continue to monitor AI spending, margin pressure and regulatory scrutiny of Microsoft’s cloud and business-software operations.

Covington Investment Advisors Inc. acquired a new position in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 85,141 shares of the software giant's stock, valued at approximately $31,759,000. Microsoft makes up about 4.1% of Covington Investment Advisors Inc.'s portfolio, making the stock its 6th largest holding.

Other hedge funds and other institutional investors have also made changes to their positions in the company. Biondo Investment Advisors LLC bought a new stake in Microsoft in the 2nd quarter valued at $16,994,000. Palidye Holdings Caymans Ltd bought a new position in Microsoft during the 2nd quarter worth about $115,071,000. Clal Insurance Enterprises Holdings Ltd bought a new position in Microsoft during the 2nd quarter worth about $248,398,000. Barbara Oil Co. bought a new position in Microsoft during the 2nd quarter worth about $8,702,000. Finally, Saranac Partners Ltd acquired a new stake in shares of Microsoft in the 2nd quarter valued at about $12,339,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Insider Buying and Selling

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 completion of the sale, the chief executive officer owned 100,447 shares of the company's stock, valued at approximately $49,007,086.83. This represents a 9.05% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Amy Hood sold 7,305 shares of the stock in a transaction that occurred on Tuesday, October 13th. The shares were sold at an average price of $545.42, for a total transaction of $3,984,293.10. Following the sale, the executive vice president directly owned 555,396 shares of the company's stock, valued at $302,924,086.32. This represents a 1.30% 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. Over the last three months, insiders have sold 150,314 shares of company stock valued at $75,404,992. Insiders own 0.03% of the company's stock.

Microsoft Stock Down 1.9%

Shares of MSFT opened at $529.05 on Friday. The stock's 50-day moving average price is $505.53 and its two-hundred day moving average price is $440.59. Microsoft Corporation has a 12 month low of $349.20 and a 12 month high of $553.72. The company has a market capitalization of $3.93 trillion, a PE ratio of 29.46, a PEG ratio of 1.73 and a beta of 1.10. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating the consensus estimate of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%. The company had revenue of $90.01 billion during the quarter, compared to analysts' expectations of $87.62 billion. During the same quarter in the prior year, the firm posted $3.65 earnings per share. The business's quarterly revenue was up 17.7% on a year-over-year basis. On average, analysts anticipate that Microsoft Corporation will post 19.65 EPS for the current year.

Microsoft Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be issued a $0.98 dividend. The ex-dividend date is Thursday, November 19th. This is a boost from Microsoft's previous quarterly dividend of $0.91. This represents a $3.92 annualized dividend and a yield of 0.7%. Microsoft's dividend payout ratio (DPR) is currently 20.27%.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Analysts expect Microsoft to remain the only major hyperscaler with positive free cash flow over the next year despite heavy AI investment. This reinforces confidence that the company can fund data-center expansion without substantial external financing. Microsoft Free Cash Flow Expected to Remain Positive
• Positive Sentiment: Microsoft signed a 20-year agreement with NiSource for approximately 1,100 megawatts of power for an Indiana data-center campus beginning in 2028. Securing electricity supports future Azure capacity as grid constraints become a bottleneck for AI expansion. Microsoft Signs Power Deal With NiSource
• Positive Sentiment: Microsoft’s custom Maia AI chips and reports that a new model achieved comparable or better performance than OpenAI’s system using a fraction of the computing power could eventually reduce reliance on expensive third-party GPUs and improve AI economics. Microsoft Wants to Make AI Cheaper
• Neutral Sentiment: Investors are focused on Azure growth, Copilot adoption, AI monetization and capital expenditures ahead of earnings. Strong demand could support the shares, but the market wants evidence that revenue growth is translating into sustainable margins.
• Negative Sentiment: The U.K. Competition and Markets Authority is investigating Microsoft’s grip on business software and says Microsoft and Amazon Web Services may need to do more to address cloud-service barriers. Potential remedies could increase compliance costs or weaken customer-lock-in advantages. UK Regulator Targets Microsoft’s Business Software Grip
• Negative Sentiment: Questions remain over whether custom chips will deliver meaningful savings: AI infrastructure, power and data-center commitments are rising rapidly, while Microsoft is reportedly seeking substantial cost reductions in Azure. That creates concern about near-term free-cash-flow and margin pressure.

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on the company. Phillip Securities downgraded Microsoft from a "moderate buy" rating to a "hold" rating in a report on Monday, October 12th. Tigress Financial lifted their price objective on shares of Microsoft from $680.00 to $690.00 and gave the company a "buy" rating in a report on Wednesday, August 5th. UBS Group boosted their price target on shares of Microsoft from $525.00 to $675.00 and gave the stock a "buy" rating in a research report on Thursday. The Goldman Sachs Group restated a "buy" rating and set a $640.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. Finally, Barclays raised their price objective on Microsoft from $512.00 to $600.00 and gave the company an "overweight" rating in a report on Tuesday. Forty-two analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $589.71.

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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