Microsoft Corporation $MSFT is TD Waterhouse Canada Inc.'s 3rd Largest Position

Key Points

• TD Waterhouse Canada Inc. increased its Microsoft stake by 1.4% in Q4, bringing its holdings to 962,834 shares valued at about $465.6 million. Microsoft is now its 3rd-largest position and makes up 2.9% of the portfolio.
• Microsoft reported strong quarterly results, with EPS of $4.27 beating estimates and revenue of $82.89 billion topping forecasts. Revenue rose 18.3% from a year earlier, underscoring continued strength in the business.
• Analysts remain broadly positive, with 39 buy ratings and a consensus Moderate Buy rating, while Microsoft also announced a quarterly dividend of $0.91 per share. However, some commentary noted concerns around rising AI spending and Microsoft’s dependence on OpenAI.

TD Waterhouse Canada Inc. boosted its holdings in Microsoft Corporation (NASDAQ:MSFT - Free Report) by 1.4% in the fourth quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 962,834 shares of the software giant's stock after buying an additional 12,933 shares during the period. Microsoft makes up 2.9% of TD Waterhouse Canada Inc.'s investment portfolio, making the stock its 3rd biggest holding. TD Waterhouse Canada Inc.'s holdings in Microsoft were worth $465,627,000 as of its most recent SEC filing.

A number of other hedge funds have also bought and sold shares of MSFT. Longfellow Investment Management Co. LLC grew its stake in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after buying an additional 20 shares in the last quarter. Bayforest Capital Ltd bought a new position in Microsoft in the 3rd quarter valued at $38,000. LSV Asset Management purchased a new position in shares of Microsoft during the 4th quarter valued at $44,000. Sellwood Investment Partners LLC purchased a new position in shares of Microsoft during the 3rd quarter valued at $49,000. Finally, Daytona Street Capital LLC purchased a new position in shares of Microsoft during the 4th quarter valued at $50,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Microsoft Stock Performance

NASDAQ MSFT opened at $405.21 on Thursday. Microsoft Corporation has a 52-week low of $356.28 and a 52-week high of $555.45. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The company has a market capitalization of $3.01 trillion, a P/E ratio of 24.12, a P/E/G ratio of 1.47 and a beta of 1.10. The company has a fifty day moving average of $397.73 and a 200-day moving average of $442.33.

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

Microsoft Announces Dividend

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

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on MSFT shares. Raymond James Financial lowered shares of Microsoft from a "market perform" rating to a "market perform" rating in a research report on Tuesday, May 5th. Scotiabank reduced their price target on shares of Microsoft from $600.00 to $550.00 and set an "outperform" rating for the company in a research report on Thursday, April 30th. China Renaissance reduced their price target on shares of Microsoft from $630.00 to $550.00 and set a "buy" rating for the company in a research report on Monday, May 4th. Arete Research boosted their price target on shares of Microsoft from $730.00 to $870.00 and gave the company a "buy" rating in a research report on Tuesday, May 5th. Finally, Morgan Stanley restated an "overweight" rating on shares of Microsoft in a research report on Thursday, January 29th. Thirty-nine investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $560.88.

Key Microsoft News

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

Insiders Place Their Bets

In other news, EVP Kathleen T. Hogan sold 12,321 shares of Microsoft 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 directly owned 137,933 shares of the company's stock, valued at approximately $56,486,322.16. The trade was a 8.20% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director John W. Stanton acquired 5,000 shares of the company's stock in a transaction dated Wednesday, February 18th. The shares were bought at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the acquisition, the director directly owned 83,905 shares in the company, valued at $33,339,651.75. The trade was a 6.34% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders own 0.03% of the company's stock.

Microsoft Profile

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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