Microsoft Corporation $MSFT Stock: Fundsmith LLP Reduces Stake

Key Points

• Fundsmith LLP reduced its Microsoft stake by 23.2% in the second quarter, selling 483,000 shares and retaining 1.60 million shares valued at approximately $595.6 million. Microsoft remains 4.4% of Fundsmith’s portfolio.
• Microsoft reported quarterly EPS of $4.74 and revenue of $90.01 billion, exceeding analyst estimates, while revenue increased 17.7% year over year. The company also raised its quarterly dividend from $0.91 to $0.98 per share.
• Wall Street remains broadly positive, with 43 analysts rating Microsoft a Buy and a consensus “Moderate Buy” rating; the average price target is $592.15.

Fundsmith LLP decreased its position in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 23.2% during the second quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The fund owned 1,596,737 shares of the software giant's stock after selling 483,000 shares during the quarter. Microsoft accounts for 4.4% of Fundsmith LLP's portfolio, making the stock its 10th largest position. Fundsmith LLP's holdings in Microsoft were worth $595,615,000 at the end of the most recent quarter.

Several other institutional investors and hedge funds also recently made changes to their positions in the company. Bank of America Corp DE purchased a new stake in Microsoft during the 2nd quarter valued at $27,338,370,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its holdings in shares of Microsoft by 0.9% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 64,375,360 shares of the software giant's stock worth $24,013,297,000 after purchasing an additional 543,172 shares in the last quarter. Legal & General Group Plc purchased a new position in shares of Microsoft in the second quarter worth $18,306,443,000. Amundi raised its stake in shares of Microsoft by 30.8% in the first quarter. Amundi now owns 41,675,076 shares of the software giant's stock worth $15,426,862,000 after purchasing an additional 9,814,598 shares during the last quarter. Finally, Dimensional Fund Advisors LP raised its stake in shares of Microsoft by 10.5% in the first quarter. Dimensional Fund Advisors LP now owns 29,323,744 shares of the software giant's stock worth $10,852,884,000 after purchasing an additional 2,784,809 shares during the last quarter. Institutional investors own 71.13% of the company's stock.

Microsoft Price Performance

Shares of MSFT opened at $524.51 on Friday. The firm has a fifty day simple moving average of $508.51 and a two-hundred day simple moving average of $446.17. The firm has a market cap of $3.90 trillion, a PE ratio of 29.20, a P/E/G ratio of 1.68 and a beta of 1.10. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07. Microsoft Corporation has a 1-year low of $349.20 and a 1-year high of $553.72.

Microsoft (NASDAQ:MSFT - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.24 by $0.50. The firm had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%. The company's revenue for the quarter was up 17.7% on a year-over-year basis. During the same period last year, the business posted $3.65 EPS. On average, equities analysts anticipate that Microsoft Corporation will post 19.66 EPS for the current year.

Microsoft Increases Dividend

The company also recently disclosed 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 represents a $3.92 dividend on an annualized basis and a yield of 0.7%. This is a boost from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date is Thursday, November 19th. Microsoft's dividend payout ratio (DPR) is currently 20.27%.

Wall Street Analysts Forecast Growth

A number of brokerages have recently issued reports on MSFT. Cantor Fitzgerald upped their price target on Microsoft from $522.00 to $608.00 and gave the company an "overweight" rating in a report on Monday, September 21st. Wells Fargo & Company lifted their price objective on Microsoft from $700.00 to $725.00 and gave the stock an "overweight" rating in a report on Thursday, October 1st. BMO Capital Markets boosted their target price on Microsoft from $515.00 to $600.00 and gave the stock an "outperform" rating in a research report on Tuesday. Scotiabank upped their target price on shares of Microsoft from $510.00 to $615.00 and gave the company an "outperform" rating in a research note on Monday, October 5th. Finally, Raymond James Financial cut shares of Microsoft from a "moderate buy" rating to a "strong sell" rating in a research note on Wednesday, September 23rd. Forty-three research analysts have rated the stock with a Buy rating, four have given a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus price target of $592.15.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure and earnings expectations remain strong. Bank of America reaffirmed its Buy rating and forecast approximately 44.8% Azure growth. Analysts expect quarterly results to be broadly in line with estimates, with Azure strength potentially offsetting heavy investment in AI infrastructure. Microsoft Stock Forecast: BofA Reaffirms Buy Ahead of Earnings
• Positive Sentiment: Microsoft’s custom silicon and security businesses could support future cloud margins. The Maia AI accelerator and other internally developed chips may reduce reliance on Nvidia, improve cost control and retain more economics from Microsoft’s AI services. Investors are also watching whether security growth helps offset data-center expenses. Microsoft: Security And Silicon Set The Stage For Cloud Margin Recovery
• Positive Sentiment: Medical AI results add another potential growth opportunity. Microsoft’s MAI-DxO reportedly diagnosed complex cases more than twice as often as general physicians in a simulation, strengthening the company’s positioning in healthcare AI, although commercialization and regulatory hurdles remain. Microsoft develops AI tool that can diagnose sequentially like a doctor
• Neutral Sentiment: The upcoming report is a major near-term catalyst. Investors will focus on Azure growth, Copilot adoption, AI monetization, capital expenditures, backlog conversion and management’s outlook. The stock is trading near its yearly high, raising expectations for a strong forecast. Microsoft's Earnings Problem: Even Great May Not Be Enough
• Negative Sentiment: AI spending and market conditions could pressure valuation and margins. Investors have recently sold some technology shares when companies raised infrastructure budgets, while a weaker overall market and higher oil prices have added volatility. Microsoft’s large data-center investment must translate into revenue growth to justify the spending. Microsoft Earnings Report To Focus On AI Momentum, Capex
• Negative Sentiment: Operational and product concerns remain. Microsoft withdrew from a U.K. data-center deal because of power-delivery delays, and Xbox cloud-streaming price changes have generated customer friction. Former CEO Bill Gates has also warned about AI safety risks, potentially increasing regulatory scrutiny. Microsoft pulls out of UK Nscale data centre deal over power delay

Insider Transactions at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 4,810 shares of the stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares of the company's stock, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Satya Nadella sold 86,525 shares of the 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 completion of the transaction, the chief executive officer directly owned 486,763 shares in the company, valued at approximately $244,092,173.98. This represents 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. Insiders have sold a total of 150,314 shares of company stock worth $75,404,992 in the last three months. 0.03% of the stock is owned by insiders.

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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