HMI Capital Management L.P. Makes New Investment in Microsoft Corporation $MSFT

Key Points

• HMI Capital Management purchased 165,300 Microsoft shares worth approximately $61.7 million, making Microsoft its fifth-largest holding and 8.7% of its portfolio. Institutional investors collectively own 71.13% of the stock.
• Microsoft exceeded quarterly expectations with $4.74 in EPS and $90.01 billion in revenue, up 17.7% year over year. The company also raised its quarterly dividend to $0.98 per share, or $3.92 annually.
• Analysts maintain a generally positive outlook, with 42 Buy ratings and an average price target of $589.71, although executives sold roughly $75.4 million of stock under pre-arranged trading plans during the latest quarter.

HMI Capital Management L.P. bought a new stake 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 bought 165,300 shares of the software giant's stock, valued at approximately $61,660,000. Microsoft comprises about 8.7% of HMI Capital Management L.P.'s investment portfolio, making the stock its 5th biggest holding.

A number of other hedge funds also recently made changes to their positions in the business. Empirical Financial Services LLC d.b.a. Empirical Wealth Management lifted its stake in Microsoft by 4.0% in the second quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management now owns 229,490 shares of the software giant's stock valued at $85,604,000 after purchasing an additional 8,773 shares during the last quarter. D.B. Root & Company LLC purchased a new stake in Microsoft in the second quarter worth $3,652,000. Markel Group Inc. increased its position in Microsoft by 0.4% in the first quarter. Markel Group Inc. now owns 537,630 shares of the software giant's stock worth $199,014,000 after buying an additional 1,950 shares during the last quarter. Bessemer Group Inc. increased its position in Microsoft by 8.4% in the first quarter. Bessemer Group Inc. now owns 6,921,677 shares of the software giant's stock worth $2,562,197,000 after buying an additional 537,634 shares during the last quarter. Finally, Taylor Securities Services Inc. bought a new stake in shares of Microsoft in the fourth quarter valued at $2,616,000. 71.13% of the stock is currently owned by institutional investors.

Insider Buying and Selling

In other news, CEO Satya Nadella sold 86,525 shares of the firm's stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total value 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 approximately $244,092,173.98. This trade represents a 15.09% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Amy Hood sold 41,674 shares of the firm's stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $498.27, for a total transaction of $20,764,903.98. Following the completion of the transaction, the executive vice president owned 533,624 shares of the company's stock, valued at $265,888,830.48. This trade represents a 7.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 150,314 shares of company stock worth $75,404,992 over the last quarter. 0.03% of the stock is owned by corporate insiders.

Microsoft Price Performance

Shares of NASDAQ MSFT opened at $529.05 on Monday. The stock has a market cap of $3.93 trillion, a PE ratio of 29.46, a price-to-earnings-growth ratio of 1.70 and a beta of 1.10. Microsoft Corporation has a fifty-two week low of $349.20 and a fifty-two week high of $553.72. 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 stock has a fifty day moving average of $505.53 and a 200-day moving average of $441.16.

Microsoft (NASDAQ:MSFT - Get Free Report) last released 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. The company had revenue of $90.01 billion for 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 for the quarter 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. Equities research analysts anticipate that Microsoft Corporation will post 19.65 earnings per share for the current year.

Microsoft Increases Dividend

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

Analyst Ratings Changes

A number of brokerages have recently commented on MSFT. Scotiabank upped their price target on Microsoft from $510.00 to $615.00 and gave the company an "outperform" rating in a research report on Monday, October 5th. CLSA reiterated an "outperform" rating on shares of Microsoft in a research note on Thursday, July 30th. Jefferies Financial Group boosted their price objective on Microsoft from $575.00 to $650.00 and gave the company a "buy" rating in a research note on Wednesday. Barclays upped their price objective on shares of Microsoft from $512.00 to $600.00 and gave the company an "overweight" rating in a report on Tuesday, October 13th. Finally, KeyCorp reiterated an "overweight" rating on shares of Microsoft in a research report on Thursday, September 3rd. Forty-two equities research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average target price of $589.71.

Microsoft News Summary

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.

About Microsoft

Microsoft Corporation NASDAQ: MSFT is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company's principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.

Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT - Free Report).

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.