Focused Investors LLC Has $148.28 Million Stock Holdings in Microsoft Corporation $MSFT

Key Points

• Focused Investors LLC trimmed its Microsoft stake by 3.1% in the fourth quarter, selling 9,800 shares and ending with 306,600 shares valued at about $148.3 million. Microsoft remains a significant holding, accounting for 4.7% of the fund’s portfolio.
• Microsoft’s latest earnings beat expectations, reporting EPS of $4.27 versus $4.06 estimated and revenue of $82.89 billion, up 18.3% year over year. The company also maintained strong profitability with a 39.34% net margin.
• Analysts remain broadly positive on Microsoft, with 39 Buy ratings and a consensus “Moderate Buy” target of $560.88. Recent commentary highlights ongoing optimism around AI and cloud growth, even as some investors worry about rising AI spending and OpenAI-related risks.

Focused Investors LLC decreased its holdings in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 3.1% in the fourth quarter, according to its most recent Form 13F filing with the SEC. The institutional investor owned 306,600 shares of the software giant's stock after selling 9,800 shares during the period. Microsoft accounts for 4.7% of Focused Investors LLC's portfolio, making the stock its 10th largest position. Focused Investors LLC's holdings in Microsoft were worth $148,278,000 as of its most recent SEC filing.

Other institutional investors and hedge funds have also made changes to their positions in the company. Longfellow Investment Management Co. LLC increased its stake in shares of Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after purchasing an additional 20 shares in the last quarter. Bayforest Capital Ltd bought a new position in shares of Microsoft during the third quarter valued at approximately $38,000. LSV Asset Management bought a new position in shares of Microsoft during the fourth quarter valued at approximately $44,000. Sellwood Investment Partners LLC bought a new position in shares of Microsoft during the third quarter valued at approximately $49,000. Finally, Daytona Street Capital LLC bought a new position in shares of Microsoft during the fourth quarter valued at approximately $50,000. Institutional investors own 71.13% of the company's stock.

Microsoft Trading Down 0.6%

Shares of MSFT stock opened at $405.21 on Thursday. Microsoft Corporation has a 1 year low of $356.28 and a 1 year high of $555.45. The firm has a fifty day moving average price of $397.73 and a 200-day moving average price of $442.33. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The company has a market cap of $3.01 trillion, a price-to-earnings ratio of 24.12, a PEG ratio of 1.47 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The firm had revenue of $82.89 billion during the quarter, compared to the consensus estimate of $81.44 billion. During the same quarter in the previous year, the firm posted $3.46 EPS. The company's revenue for the quarter was up 18.3% compared to the same quarter last year. As a group, equities analysts predict that Microsoft Corporation will post 16.76 earnings per share for the current year.

Microsoft Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. Microsoft's payout ratio is presently 21.67%.

Insiders Place Their Bets

In other news, EVP Kathleen T. Hogan sold 12,321 shares of the business's stock in a transaction on Friday, March 6th. The shares were sold at an average price of $409.52, for a total transaction of $5,045,695.92. Following the completion of the sale, the executive vice president owned 137,933 shares of the company's stock, valued at $56,486,322.16. The trade was a 8.20% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director John W. Stanton acquired 5,000 shares of the business's stock in a transaction dated Wednesday, February 18th. The shares were acquired at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the transaction, the director owned 83,905 shares in the company, valued at approximately $33,339,651.75. This trade represents a 6.34% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 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: Wedbush reaffirmed Microsoft as an outperform and kept a $575 price target, while Phillip Securities upgraded the stock to buy with a $485 target, underscoring Wall Street’s continued optimism about Microsoft’s long-term AI and cloud growth. Benzinga report
• Positive Sentiment: Several articles highlighted Microsoft as a top long-term or “battered” software stock, with some investors seeing the pullback as an opportunity to buy a dominant franchise at a more attractive valuation. 247WallSt article
• Neutral Sentiment: Microsoft is reportedly looking at startup acquisitions to reduce dependence on OpenAI, which could be a strategic positive over time but also signals that the current partnership is not viewed as fully secure. Reuters article
• Neutral Sentiment: LinkedIn plans to cut about 5% of its workforce as part of a restructuring, which may support margins but also reflects caution across Microsoft’s broader business. Reuters/Invezz article
• Negative Sentiment: Ongoing testimony in Elon Musk’s lawsuit against OpenAI is putting Microsoft’s role in OpenAI under a microscope, reviving concerns about governance, reliance on OpenAI, and possible legal or reputational overhang. CNBC article
• Negative Sentiment: Some investors are worried that Microsoft’s AI capex is rising faster than the market can justify, with articles warning that the company must prove a timely return on its AI investments to sustain the stock’s premium. Motley Fool article

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on the stock. Evercore reduced their price target on shares of Microsoft from $580.00 to $510.00 and set an "outperform" rating for the company in a research report on Thursday, April 30th. Benchmark reissued a "buy" rating and set a $525.00 price target (up from $450.00) on shares of Microsoft in a research report on Tuesday, April 28th. Wells Fargo & Company raised their price target on shares of Microsoft from $615.00 to $625.00 and gave the company an "overweight" rating in a research report on Thursday, April 30th. Melius Research set a $430.00 price target on shares of Microsoft in a research report on Monday, February 9th. Finally, Rothschild & Co Redburn reduced their price target on shares of Microsoft from $450.00 to $400.00 and set a "neutral" rating for the company in a research report on Thursday, April 23rd. Thirty-nine equities research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $560.88.

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).

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