Microsoft Corporation $MSFT Shares Acquired by Red Wave Investments LLC

Key Points

• Red Wave Investments increased its Microsoft position by 525.2% in the second quarter, holding 49,812 shares valued at $18.6 million. Institutional investors and hedge funds collectively own 71.13% of Microsoft.
• Analyst sentiment remains strongly positive, with 43 Buy ratings, four Holds and one Sell; the consensus rating is “Moderate Buy” with an average price target of $571.18.
• Microsoft exceeded quarterly earnings and revenue expectations, reporting $4.74 in EPS and $90.01 billion in revenue, while raising its quarterly dividend to $0.98. Key risks include heavy AI infrastructure spending, valuation concerns and recent insider selling.

Red Wave Investments LLC grew its position in Microsoft Corporation (NASDAQ:MSFT - Free Report) by 525.2% in the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund owned 49,812 shares of the software giant's stock after acquiring an additional 41,844 shares during the quarter. Microsoft makes up approximately 4.7% of Red Wave Investments LLC's holdings, making the stock its 7th largest position. Red Wave Investments LLC's holdings in Microsoft were worth $18,581,000 at the end of the most recent quarter.

Other hedge funds have also recently added to or reduced their stakes in the company. Frankly Finances LLC bought a new position in Microsoft in the second quarter worth about $35,000. MidAtlantic Capital Management Inc. acquired a new position in Microsoft during the 4th quarter worth $59,000. Fiduciary Advisors Inc. grew its position in Microsoft by 37.4% in the 2nd quarter. Fiduciary Advisors Inc. now owns 125 shares of the software giant's stock valued at $47,000 after buying an additional 34 shares in the last quarter. Lifetime Wealth Management P.C. bought a new position in shares of Microsoft in the fourth quarter valued at $101,000. Finally, Glynn Capital Management LLC boosted its position in shares of Microsoft by 34.2% in the second quarter. Glynn Capital Management LLC now owns 255 shares of the software giant's stock worth $95,000 after buying an additional 65 shares during the period. Institutional investors and hedge funds own 71.13% of the company's stock.

Analyst Ratings Changes

Several analysts recently commented on MSFT shares. Guggenheim restated a "buy" rating and set a $586.00 price target on shares of Microsoft in a report on Monday, July 27th. Needham & Company LLC started coverage on Microsoft in a report on Wednesday, September 23rd. They set a "buy" rating on the stock. KeyCorp reaffirmed an "overweight" rating on shares of Microsoft in a research report on Thursday, September 3rd. TD Cowen reiterated a "buy" rating and set a $540.00 price target on shares of Microsoft in a research note on Thursday, July 30th. Finally, UBS Group initiated coverage on Microsoft in a report on Wednesday, September 23rd. They set a "buy" rating on the stock. Forty-three research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, Microsoft currently has a consensus rating of "Moderate Buy" and an average price target of $571.18.

Microsoft Stock Performance

Shares of Microsoft stock opened at $517.53 on Monday. The company's fifty day simple moving average is $490.08 and its 200-day simple moving average is $430.19. Microsoft Corporation has a 1 year low of $349.20 and a 1 year high of $553.72. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07. The company has a market cap of $3.84 trillion, a price-to-earnings ratio of 28.82, a PEG ratio of 1.66 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating analysts' consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The business had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. During the same quarter in the prior year, the business earned $3.65 earnings per share. The firm's revenue for the quarter was up 17.7% on a year-over-year basis. As a group, sell-side analysts expect that Microsoft Corporation will post 19.62 EPS for the current year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Thursday, November 19th will be issued a $0.98 dividend. This is a boost from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $3.92 annualized dividend and a yield of 0.8%. Microsoft's payout ratio is presently 20.27%.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure and AI demand remain the primary catalyst. Investor data and analyst commentary point to accelerating Azure demand, while Microsoft’s recent earnings showed its fastest cloud growth in four years. The improving demand is helping ease concerns that the company’s substantial AI infrastructure spending will not generate adequate returns. Ca$htag: MSFT Azure Cloud Drives Soaring Demand
• Positive Sentiment: Wells Fargo added Microsoft to its Q4 Tactical Ideas list and raised its price target to $725, citing Azure’s growth potential and the prospect of improved AI monetization through Copilot. The action adds to a series of bullish analyst revisions; one report noted that 52 analysts covering Microsoft currently have no sell ratings. With Azure as a Catalyst, Microsoft Is Positioned for Sustained Growth
• Positive Sentiment: Microsoft’s OpenAI relationship provides potential additional value. Investors are increasingly focused on Microsoft’s stake and commercial partnership with OpenAI, particularly ahead of a possible OpenAI initial public offering that could provide a market reference for the investment. OpenAI’s Future IPO Keeps Me Buying Microsoft
• Positive Sentiment: Microsoft introduced new real-time AI speech models for customer-service agents, multilingual assistants and voice interfaces. The products broaden Microsoft’s enterprise AI offering and could support additional cloud consumption and software revenue. Microsoft Targets Contact Center Market With Real-Time AI Voice Models
• Neutral Sentiment: Investors are awaiting Microsoft’s October 7 Surface and Windows event. New hardware or Windows updates could support the ecosystem, although the event has not yet produced a material earnings catalyst. Microsoft Stock Notches Up Ahead of the Surface Show
• Negative Sentiment: Risks include heavy AI capital spending, valuation concerns and broader market concentration. Critics argue that rising data-center capacity could pressure compute pricing and returns, while strategists warn that a market correction could disproportionately affect megacap technology stocks. Microsoft’s dividend remains affordable, but AI infrastructure spending and lease commitments could limit future dividend growth. Morgan Stanley Strategist Sees Market Drawdown Potential

Insider Buying and Selling at Microsoft

In other Microsoft news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the completion of the transaction, the chief executive officer directly owned 100,447 shares in the company, valued at $49,007,086.83. This represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Takeshi Numoto sold 4,810 shares of Microsoft stock in a transaction 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 transaction, the executive vice president directly owned 42,677 shares of the company's stock, valued at approximately $21,188,276.96. The trade was a 10.13% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders sold 143,009 shares of company stock worth $71,420,699. 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, 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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