Diamond Hill Capital Management LLC Investment Advisor Cuts Holdings in Microsoft Corporation $MSFT

Key Points

• Diamond Hill reduced its Microsoft position by 18.9% in the second quarter, selling 193,069 shares and retaining 830,654 shares valued at approximately $309.9 million.
• Institutional ownership remains high at 71.13%, while analysts maintain a “Moderate Buy” consensus with an average price target of $578.73; 41 analysts rate the stock a Buy.
• Microsoft reported stronger-than-expected quarterly results, with revenue up 17.7% year over year and EPS of $4.74, and increased its quarterly dividend to $0.98 per share.

Diamond Hill Capital Management LLC Investment Advisor reduced its holdings in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 18.9% in the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 830,654 shares of the software giant's stock after selling 193,069 shares during the quarter. Microsoft accounts for about 2.5% of Diamond Hill Capital Management LLC Investment Advisor's holdings, making the stock its 6th biggest position. Diamond Hill Capital Management LLC Investment Advisor's holdings in Microsoft were worth $309,851,000 as of its most recent SEC filing.

A number of other institutional investors and hedge funds also recently made changes to their positions in the business. Auto Owners Insurance Co lifted its holdings in shares of Microsoft by 56,160.8% in the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock valued at $29,073,486,000 after purchasing an additional 60,009,531 shares in the last quarter. Amundi grew its holdings in Microsoft by 30.8% during the first quarter. Amundi now owns 41,675,076 shares of the software giant's stock worth $15,426,862,000 after buying an additional 9,814,598 shares in the last quarter. Fisher Asset Management LLC raised its position in Microsoft by 1.8% in the 4th quarter. Fisher Asset Management LLC now owns 25,300,410 shares of the software giant's stock valued at $12,235,785,000 after buying an additional 458,014 shares during the last quarter. Dimensional Fund Advisors LP lifted its stake in Microsoft by 10.5% during the 1st quarter. Dimensional Fund Advisors LP now owns 29,323,744 shares of the software giant's stock valued at $10,852,884,000 after acquiring an additional 2,784,809 shares in the last quarter. Finally, Hsbc Holdings PLC lifted its stake in Microsoft by 7.8% during the 4th quarter. Hsbc Holdings PLC now owns 22,138,798 shares of the software giant's stock valued at $10,715,379,000 after acquiring an additional 1,599,412 shares in the last quarter. Institutional investors and hedge funds own 71.13% of the company's stock.

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on MSFT. Bank of America boosted their price target on shares of Microsoft from $500.00 to $600.00 and gave the stock a "buy" rating in a report on Tuesday, September 1st. Deutsche Bank Aktiengesellschaft reissued a "buy" rating on shares of Microsoft in a research report on Monday, July 20th. Guggenheim restated a "buy" rating and issued a $586.00 target price on shares of Microsoft in a research note on Monday, July 27th. Barclays reduced their target price on Microsoft from $545.00 to $512.00 and set an "overweight" rating for the company in a report on Thursday, July 30th. Finally, The Goldman Sachs Group reaffirmed a "buy" rating and set a $640.00 price target on shares of Microsoft in a research report on Thursday, July 30th. Forty-one investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have assigned a Sell rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $578.73.

Microsoft Stock Performance

NASDAQ:MSFT opened at $529.30 on Wednesday. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The business has a fifty day simple moving average of $495.52 and a two-hundred day simple moving average of $432.04. Microsoft Corporation has a 1 year low of $349.20 and a 1 year high of $553.72. The company has a market capitalization of $3.93 trillion, a P/E ratio of 29.47, a P/E/G ratio of 1.69 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (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 company had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. During the same quarter in the previous year, the firm posted $3.65 earnings per share. The company's quarterly revenue was up 17.7% compared to the same quarter last year. On average, analysts expect that Microsoft Corporation will post 19.62 earnings per share for the current year.

Microsoft Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be paid a dividend of $0.98 per share. This is a positive change from Microsoft's previous quarterly dividend of $0.91. This represents a $3.92 annualized dividend and a yield of 0.7%. The ex-dividend date of this dividend is Thursday, November 19th. Microsoft's dividend payout ratio is 20.27%.

Insiders Place Their Bets

In other news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total value of $4,878,900.00. Following the transaction, the chief executive officer owned 100,447 shares of the company's stock, valued at $49,007,086.83. This represents a 9.05% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Satya Nadella sold 86,525 shares of the stock in a transaction on 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 directly owned 486,763 shares in the company, valued at $244,092,173.98. The trade was 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 143,009 shares of company stock valued at $71,420,699 in the last ninety days. Corporate insiders own 0.03% of the company's stock.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Analyst upgrade and higher price target: Melius Research upgraded Microsoft from “Hold” to “Buy” and set a $665 target, arguing that corporate concerns about AI safety, governance and security could increase demand for Microsoft’s enterprise tools. BNP Paribas also reportedly raised its forecast to $604, citing Azure growth, Copilot consumption-based pricing and the integration of OpenAI-related revenue. Melius Research upgrades Microsoft
• Positive Sentiment: AI and cloud momentum remain the core catalyst: Investors continue to focus on strong Azure demand, expanding AI infrastructure requirements and Copilot adoption. Microsoft is increasingly viewed as a relatively dependable enterprise AI leader, with its installed base, cloud platform and security products potentially giving it an advantage as businesses seek trusted AI solutions. Microsoft viewed as an AI leader
• Positive Sentiment: Upcoming Windows and Surface event: Microsoft’s October 7 event will highlight on-device AI and could provide updates on Windows, Surface and Copilot monetization. The event is being watched for evidence that AI can reinvigorate the devices business while complementing faster-growing cloud operations. Microsoft Windows and Surface event
• Neutral Sentiment: Internal AI model shift: Microsoft is reportedly steering employees away from Anthropic’s Claude toward internally developed AI models. This could reduce costs and dependence on outside providers, but investors will watch whether Microsoft maintains performance and enterprise customer confidence.
• Negative Sentiment: Risks include valuation, spending and rates: Microsoft’s strong recent rally has increased valuation concerns, while substantial capital expenditures needed for data centers could pressure free cash flow. Rising Treasury yields may also weigh on richly valued AI stocks. Rising Treasury yields and AI stocks
• Negative Sentiment: Isolated selling signals: A member of Congress disclosed a sale of Microsoft shares ahead of earnings season. The trade is a limited sentiment indicator rather than a fundamental development, but it may attract attention after reports that Microsoft insiders have sold shares without reported purchases in recent months. Congressman sells Microsoft stock

Microsoft 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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