Jennison Associates LLC Trims Stock Position in Microsoft Corporation $MSFT

Key Points

• Jennison Associates cut its Microsoft position by 8.7% in the second quarter, selling 1.56 million shares. The firm still held 16.33 million shares worth approximately $6.09 billion, representing 3.7% of its portfolio.
• Microsoft’s enterprise AI strategy remains a key growth driver, with its redesigned Copilot platform and usage-based pricing model supporting optimism about Azure and AI monetization. Analysts maintain a broadly bullish outlook, with a consensus “Moderate Buy” rating and average price target of $569.29.
• Microsoft reported stronger-than-expected quarterly results, including $90.01 billion in revenue and $4.74 in earnings per share, while raising its quarterly dividend to $0.98 per share. Investors are also weighing heavy AI infrastructure spending, capacity constraints and insider stock sales as potential risks to margins and predictability.

Jennison Associates LLC trimmed its holdings in Microsoft Corporation (NASDAQ:MSFT - Free Report) by 8.7% in the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The firm owned 16,326,489 shares of the software giant's stock after selling 1,557,071 shares during the period. Microsoft comprises about 3.7% of Jennison Associates LLC's investment portfolio, making the stock its 7th largest holding. Jennison Associates LLC owned about 0.22% of Microsoft worth $6,090,107,000 at the end of the most recent quarter.

Other hedge funds also recently modified their holdings of the company. Frankly Finances LLC acquired a new stake in Microsoft during the 2nd quarter worth approximately $35,000. Fiduciary Advisors Inc. increased its position in shares of Microsoft by 37.4% during the second quarter. Fiduciary Advisors Inc. now owns 125 shares of the software giant's stock worth $47,000 after acquiring an additional 34 shares in the last quarter. MidAtlantic Capital Management Inc. acquired a new stake in shares of Microsoft during the fourth quarter worth $59,000. Lifetime Wealth Management P.C. acquired a new stake in shares of Microsoft during the fourth quarter worth $101,000. Finally, Ramsey Quantitative Systems bought a new stake in Microsoft in the 2nd quarter valued at $112,000. Institutional investors and hedge funds own 71.13% of the company's stock.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft unveiled a redesigned Copilot “super app” that combines access to Office applications with coding tools, autonomous AI agents and an Autopilot feature. The initiative is aimed primarily at business users and could improve enterprise adoption, usage and monetization of Microsoft’s AI offerings. Reuters article
• Positive Sentiment: Oppenheimer raised its Microsoft price target to $570, citing the company’s shift toward enterprise AI agents and a billing model tied more closely to customer usage. Other recent analyst targets have also moved higher, reinforcing expectations for sustained Azure and AI growth. Oppenheimer target article
• Positive Sentiment: Investors appear more confident that Microsoft can benefit from AI without depending on a single large-model provider. Its Azure cloud platform, Microsoft 365 ecosystem and enterprise distribution provide multiple avenues for converting AI investment into recurring revenue. MarketWatch article
• Positive Sentiment: Unusually heavy bullish options activity, including a large call spread, suggests traders are positioning for additional upside. Technical analysts identified a potential move toward approximately $555, although this is market positioning rather than a fundamental forecast. Barchart options article
• Neutral Sentiment: Broader market gains, led by AI stocks, provided an additional tailwind. However, elevated oil prices, Treasury yields and uncertainty over potential Federal Reserve policy changes remain important macroeconomic risks.
• Negative Sentiment: Microsoft is moving away from a consumer-focused personal-assistant strategy and concentrating Copilot on workplace use. The usage-based approach could unlock greater revenue, but it may also make sales less predictable than traditional subscriptions if customer adoption is slower than expected. Financial Post article
• Negative Sentiment: Investors continue to monitor Microsoft’s substantial AI infrastructure spending, data-center capacity constraints and a reported 277-job reduction in Washington. These factors could pressure near-term margins even as Azure demand remains strong.

Wall Street Analysts Forecast Growth

A number of analysts have recently commented on MSFT shares. Deutsche Bank Aktiengesellschaft restated a "buy" rating on shares of Microsoft in a report on Monday, July 20th. Oppenheimer boosted their target price on Microsoft from $515.00 to $570.00 and gave the company an "outperform" rating in a research note on Tuesday. Tigress Financial upped their price target on Microsoft from $680.00 to $690.00 and gave the stock a "buy" rating in a research report on Wednesday, August 5th. UBS Group began coverage on shares of Microsoft in a research note on Wednesday. They set a "buy" rating for the company. Finally, Royal Bank Of Canada reissued an "outperform" rating on shares of Microsoft in a research report on Thursday, September 10th. Forty-three analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $569.29.

Microsoft Trading Up 3.7%

Shares of NASDAQ:MSFT opened at $516.17 on Friday. Microsoft Corporation has a 12-month low of $349.20 and a 12-month high of $553.72. The business has a 50 day moving average of $477.93 and a 200-day moving average of $426.17. The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The stock has a market cap of $3.83 trillion, a PE ratio of 28.74, a P/E/G ratio of 1.66 and a beta of 1.11.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, topping 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 quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the company earned $3.65 earnings per share. As a group, equities research analysts forecast that Microsoft Corporation will post 19.62 earnings per share for the current year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be given 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 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend is Thursday, November 19th. Microsoft's payout ratio is 20.27%.

Insider Buying and Selling at Microsoft

In other news, EVP Amy Hood sold 41,674 shares of Microsoft stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $498.27, for a total value of $20,764,903.98. Following the completion of the sale, the executive vice president directly owned 533,624 shares in the company, valued at approximately $265,888,830.48. The trade was a 7.24% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Takeshi Numoto sold 4,810 shares of the business's stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares of the company's stock, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 143,009 shares of company stock worth $71,420,699 over the last quarter. Company insiders own 0.03% of the company's stock.

Microsoft Company Profile

Microsoft Corporation is a global technology company that develops software, cloud services, devices and digital solutions for consumers, businesses and public-sector organizations. Its products and services include the Windows operating system, Microsoft 365 productivity applications, Teams collaboration software, Dynamics business applications and Azure cloud computing services.

The company also operates LinkedIn, GitHub and Xbox, which includes gaming consoles, video games and related online services.

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