Microsoft Corporation $MSFT Stake Lifted by Dimensional Fund Advisors LP

Key Points

• Dimensional Fund Advisors increased its Microsoft stake by 10.5% in the first quarter, adding 2.78 million shares to own 29.3 million shares valued at approximately $10.85 billion. Institutional investors collectively hold 71.13% of Microsoft.
• Microsoft reported quarterly revenue of $90.01 billion and earnings of $4.74 per share, exceeding analyst expectations, with revenue rising 17.7% year over year. The company also declared a quarterly dividend of $0.91 per share, representing a 0.7% annualized yield.
• Analysts remain broadly positive, with 42 Buy ratings and a consensus price target of $558.87, but investors face risks from the stock’s elevated valuation, insider selling, heavy AI infrastructure spending and potential dependence on OpenAI for AI revenue.

Dimensional Fund Advisors LP raised its position in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 10.5% in the first quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The institutional investor owned 29,323,744 shares of the software giant's stock after purchasing an additional 2,784,809 shares during the period. Microsoft comprises 2.3% of Dimensional Fund Advisors LP's portfolio, making the stock its 3rd biggest position. Dimensional Fund Advisors LP owned 0.39% of Microsoft worth $10,852,884,000 at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors have also made changes to their positions in MSFT. Longfellow Investment Management Co. LLC raised its holdings in shares of 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 purchasing an additional 20 shares in the last quarter. Shepherd Kaplan Krochuk LLC boosted its stake in shares of Microsoft by 4.9% during the third quarter. Shepherd Kaplan Krochuk LLC now owns 431 shares of the software giant's stock valued at $223,000 after purchasing an additional 20 shares in the last quarter. Fischer Investment Strategies LLC increased its holdings in Microsoft by 3.1% during the fourth quarter. Fischer Investment Strategies LLC now owns 697 shares of the software giant's stock valued at $337,000 after buying an additional 21 shares during the period. Pollock Investment Advisors LLC increased its holdings in Microsoft by 0.8% during the third quarter. Pollock Investment Advisors LLC now owns 2,805 shares of the software giant's stock valued at $1,453,000 after buying an additional 21 shares during the period. Finally, Better Money Decisions LLC raised its stake in Microsoft by 0.6% in the second quarter. Better Money Decisions LLC now owns 3,498 shares of the software giant's stock worth $1,740,000 after buying an additional 21 shares in the last quarter. Institutional investors own 71.13% of the company's stock.

Microsoft Stock Performance

Shares of MSFT opened at $487.46 on Thursday. Microsoft Corporation has a 12 month low of $349.20 and a 12 month high of $553.72. The stock has a fifty day moving average price of $402.41 and a 200-day moving average price of $406.03. 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 firm has a market cap of $3.62 trillion, a PE ratio of 27.14, a P/E/G ratio of 1.59 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 the consensus estimate of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The firm had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. During the same period in the previous year, the business earned $3.65 EPS. The firm's revenue for the quarter was up 17.7% on a year-over-year basis. Equities research analysts predict that Microsoft Corporation will post 19.56 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. The ex-dividend date is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.7%. 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 growth remain the main bullish drivers. Azure revenue surpassed $100 billion for fiscal 2026, while fourth-quarter cloud growth accelerated to 43%. Microsoft also reported quarterly revenue of $90.01 billion and earnings of $4.74 per share, both ahead of consensus estimates. Microsoft Azure Fiscal 2026 Sales Exceed $100B
• Positive Sentiment: Analyst confidence is strengthening. Tigress Financial raised its Microsoft price target to $690, citing durable AI and cloud growth, while Goldman Sachs reportedly added Microsoft to its high-conviction list. Tigress Raises Microsoft Price Target
• Positive Sentiment: Microsoft expanded its enterprise AI ecosystem through an A10 Networks warrant, a healthcare partnership with Assuta Medical Centers and deeper use of OpenAI models in GitHub Copilot. These developments could support AI adoption and recurring software demand.
• Neutral Sentiment: OpenAI concentration is drawing investor attention. Reports suggest OpenAI may represent roughly 70% of Microsoft’s AI revenue, highlighting both the commercial value of the partnership and the risk of relying heavily on one customer and technology partner. OpenAI May Account for 70% of Microsoft's AI Revenue
• Negative Sentiment: Investors are reassessing valuation after a sharp rally. Commentary increasingly describes Microsoft as potentially overvalued or technically extended, encouraging profit-taking despite strong fundamentals.
• Negative Sentiment: Legal and insider-selling headlines add pressure. Multiple law firms promoted a securities-fraud class action alleging misleading Copilot and Azure-related disclosures, with an August 11 lead-plaintiff deadline. Separately, EVP Takeshi Numoto sold 4,810 shares worth approximately $2.4 million, reducing his direct ownership by 10.13%.
• Negative Sentiment: Microsoft faces scrutiny over AI infrastructure spending, including more than $100 billion in future data-center lease commitments across Big Tech and potential optical-component supply constraints. These commitments could improve long-term capacity but raise concerns about capital intensity, execution and near-term margins.

Insider Transactions at Microsoft

In related news, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP Takeshi Numoto sold 4,810 shares of the business's stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the sale, the executive vice president directly owned 42,677 shares in the company, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their position. The SEC filing for this sale provides additional information. Over the last 90 days, insiders have sold 28,572 shares of company stock worth $12,896,430. Insiders own 0.03% of the company's stock.

Analyst Ratings Changes

A number of analysts have weighed in on MSFT shares. China Renaissance lowered their target price on Microsoft from $630.00 to $550.00 and set a "buy" rating for the company in a report on Monday, May 4th. DA Davidson reissued a "buy" rating and issued a $550.00 price target on shares of Microsoft in a research report on Thursday, July 30th. Jefferies Financial Group restated a "buy" rating on shares of Microsoft in a research note on Monday, May 4th. Barclays dropped their price objective on Microsoft from $545.00 to $512.00 and set an "overweight" rating on the stock in a research report on Thursday, July 30th. Finally, Citizens Jmp reiterated a "market outperform" rating and issued a $550.00 target price on shares of Microsoft in a research note on Tuesday, July 28th. Forty-two investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus target price of $558.87.

About Microsoft

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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