Microsoft Corporation $MSFT Shares Newly Acquired by Primecap Management Co. CA

Key Points

• Primecap Management acquired 7.14 million Microsoft shares in the second quarter, valued at approximately $2.66 billion, making Microsoft its 11th-largest holding and representing 1.6% of its portfolio.
• Institutional ownership remains high at 71.13%, with several major investors—including the Canada Pension Plan Investment Board—also initiating new positions in Microsoft.
• Microsoft’s AI growth outlook remains central to investor interest, but analysts are weighing strong Azure and Copilot potential against heavy AI capital spending, infrastructure constraints, and competition in custom AI chips.

Primecap Management Co. CA bought a new position in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm bought 7,140,870 shares of the software giant's stock, valued at approximately $2,663,687,000. Microsoft accounts for 1.6% of Primecap Management Co. CA's portfolio, making the stock its 11th largest holding. Primecap Management Co. CA owned 0.10% of Microsoft at the end of the most recent quarter.

Several other large investors have also made changes to their positions in MSFT. PDT Partners LLC purchased a new position in Microsoft during the 2nd quarter valued at approximately $522,000. Palisade Capital Management LP bought a new stake in Microsoft in the 2nd quarter worth approximately $36,371,000. Cooper Haims Advisors LLC bought a new stake in Microsoft in the 2nd quarter worth approximately $2,383,000. Canada Pension Plan Investment Board purchased a new stake in shares of Microsoft during the 2nd quarter worth approximately $5,653,812,000. Finally, Castlekeep Investment Advisors LLC purchased a new stake in shares of Microsoft during the 2nd quarter worth approximately $4,646,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft received a bullish signal ahead of its Oct. 28 earnings report after Bernstein raised its price target to $662 and maintained an “Outperform” rating. Investors are watching Azure growth, commercial remaining performance obligations, and whether Microsoft’s more than $115 billion in recent capital spending is translating into AI revenue. Microsoft Given New Price Target at Sanford C. Bernstein
• Positive Sentiment: The company unveiled its Maia 300 AI accelerator and plans multi-gigawatt deployments beginning next year. The chip could reduce Microsoft’s reliance on Nvidia and lower inference costs, supporting the long-term economics of its AI infrastructure strategy. Microsoft's New AI Chip Could Change the Economics of AI
• Positive Sentiment: Microsoft introduced security controls for enterprise AI agents and emphasized that frontier models can pose insider-threat-like risks. The initiative could strengthen demand for Microsoft’s security products as businesses adopt agentic AI. Microsoft Introduces Security Features for AI Agents
• Positive Sentiment: Analysts continue to view Microsoft as a broad way to monetize AI through Azure, Copilot, software subscriptions, and security. Expectations call for Azure growth of roughly 45%, though capacity constraints could limit near-term upside. Microsoft Earnings Preview
• Neutral Sentiment: Microsoft withdrew as anchor customer from Nscale’s planned U.K. AI data center, reportedly because of electricity-grid and power-supply delays. The decision highlights infrastructure constraints but may also reflect disciplined capital allocation; third-party operators could benefit if hyperscalers build less capacity themselves. Microsoft Pulls Out of U.K. Data Center Deal
• Negative Sentiment: Investors remain concerned that Microsoft’s aggressive AI capital expenditures could pressure free cash flow and margins if Azure monetization does not accelerate. One analyst also said Maia remains well behind Nvidia and Google’s custom chips, limiting its near-term competitive impact. Microsoft AI Bull Case and Valuation Risks

Microsoft Price Performance

Shares of MSFT stock opened at $533.52 on Tuesday. The stock's 50-day moving average is $506.08 and its 200 day moving average is $442.31. Microsoft Corporation has a 1-year low of $349.20 and a 1-year high of $553.72. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The company has a market cap of $3.96 trillion, a P/E ratio of 29.71, a PEG ratio of 1.70 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping analysts' consensus estimates of $4.24 by $0.50. The business had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The firm's revenue was up 17.7% on a year-over-year basis. During the same period in the previous year, the company posted $3.65 earnings per share. Research analysts predict that Microsoft Corporation will post 19.65 earnings per share for the current fiscal year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be paid a dividend of $0.98 per share. The ex-dividend date is Thursday, November 19th. 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 dividend yield of 0.7%. Microsoft's payout ratio is presently 20.27%.

Insider Activity at Microsoft

In other Microsoft news, EVP Amy Hood sold 41,674 shares of the company'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 transaction, the executive vice president owned 533,624 shares in the company, valued at approximately $265,888,830.48. This represents a 7.24% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Satya Nadella sold 86,525 shares of the business's stock in a transaction dated 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 sale, the chief executive officer owned 486,763 shares in the company, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 150,314 shares of company stock worth $75,404,992. 0.03% of the stock is owned by company insiders.

Analyst Upgrades and Downgrades

A number of research analysts recently weighed in on MSFT shares. Rothschild & Co Redburn set a $440.00 target price on shares of Microsoft in a report on Monday, September 21st. TD Cowen upped their price objective on Microsoft from $540.00 to $625.00 and gave the company a "buy" rating in a research report on Thursday. Phillip Securities downgraded shares of Microsoft from a "moderate buy" rating to a "hold" rating in a research note on Monday, October 12th. Sanford C. Bernstein raised their price target on Microsoft from $660.00 to $662.00 and gave the stock an "outperform" rating in a research note on Monday. Finally, Wells Fargo & Company raised their price target on shares of Microsoft from $700.00 to $725.00 and gave the stock an "overweight" rating in a research note on Thursday, October 1st. Forty-three investment analysts have rated the stock with a Buy rating, four have given a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $590.30.

Microsoft Profile

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.

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