Palouse Capital Management Inc. Sells 1,292 Shares of Microsoft Corporation $MSFT

Key Points

• Palouse Capital Management reduced its Microsoft stake by 8.3%, selling 1,292 shares and retaining 14,330 shares worth approximately $5.35 million. Microsoft remains the fund’s third-largest holding and represents about 3.3% of its portfolio.
• Microsoft reported quarterly earnings of $4.74 per share on $90.01 billion in revenue, beating analyst estimates, with revenue up 17.7% year over year. The company also declared a $0.91 quarterly dividend, equal to a 0.8% annualized yield.
• Analysts maintain a generally positive outlook, with 42 Buy ratings and a consensus price target of $560.27, but investors are watching Microsoft’s sharply higher AI-related capital spending and declining free cash flow for evidence that the investments will generate sufficient returns.

Palouse Capital Management Inc. trimmed its holdings in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 8.3% during the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 14,330 shares of the software giant's stock after selling 1,292 shares during the quarter. Microsoft accounts for about 3.3% of Palouse Capital Management Inc.'s portfolio, making the stock its 3rd largest position. Palouse Capital Management Inc.'s holdings in Microsoft were worth $5,345,000 at the end of the most recent quarter.

Several other institutional investors and hedge funds have also recently added to or reduced their stakes in the business. Longfellow Investment Management Co. LLC raised its position in Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after purchasing an additional 20 shares during the last quarter. Bernzott Capital Advisors bought a new stake in shares of Microsoft in the 4th quarter valued at about $34,000. Timmons Wealth Management LLC bought a new stake in shares of Microsoft in the 4th quarter valued at about $36,000. Fairway Wealth LLC increased its stake in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant's stock valued at $43,000 after buying an additional 66 shares during the period. Finally, University of Illinois Foundation acquired a new stake in shares of Microsoft in the second quarter valued at about $50,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Microsoft Trading Up 0.4%

NASDAQ:MSFT opened at $483.24 on Friday. Microsoft Corporation has a 12 month low of $349.20 and a 12 month 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 stock has a market capitalization of $3.59 trillion, a price-to-earnings ratio of 26.91, a PEG ratio of 1.56 and a beta of 1.11. The firm has a fifty day simple moving average of $419.61 and a two-hundred day simple moving average of $409.30.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The business's quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the business earned $3.65 earnings per share. Analysts expect that Microsoft Corporation will post 19.59 EPS for the current fiscal year.

Microsoft Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft's dividend payout ratio is 20.27%.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft is reportedly preparing to launch its Maia 300 AI accelerator as soon as this fall and is discussing production with TSMC. Developing proprietary chips could reduce long-term reliance on Nvidia, improve supply-chain control, and support Microsoft’s expanding AI infrastructure. Microsoft’s Betting Big on Its Own AI Chips
• Positive Sentiment: Meta has reportedly become one of Microsoft’s largest Azure AI customers, spending hundreds of millions of dollars annually and consuming substantial computing capacity. The relationship reinforces evidence that enterprise demand is translating into Azure revenue. Meta Emerges as a Major Microsoft Azure AI Client
• Positive Sentiment: Microsoft raised its quarterly dividend to $0.91 per share, while Azure revenue reportedly surpassed $100 billion. Analysts and financial commentators also highlighted a roughly $678 billion backlog and continued strong demand for cloud and AI services. Microsoft Raises Dividend as AI Capital Spending Hits Record Levels
• Neutral Sentiment: Microsoft approved the Horizon 1 Texas data-center project involving IREN, potentially expanding capacity available for AI workloads. The development is strategically relevant, although the near-term financial benefit to Microsoft remains unclear. Microsoft Accepts Horizon 1
• Negative Sentiment: Annual capital spending has climbed nearly 80% to about $115.9 billion, while free cash flow declined. Investors remain focused on whether AI revenue growth will generate adequate returns on this spending. Microsoft Spent $115.9 Billion on AI
• Negative Sentiment: TCI Management reportedly exited its Microsoft position and increased its Alphabet stake, adding a notable institutional-selling signal. Separately, commentary warned that Microsoft’s valuation depends on optimistic earnings forecasts, while higher bond yields could reduce the present value of future AI profits. TCI Exits Microsoft

Insider Buying and Selling

In other news, 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 completion of the sale, the executive vice president owned 42,677 shares in the company, valued at $21,188,276.96. The trade was a 10.13% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the company's stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the transaction, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. The trade was a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 37,310 shares of company stock worth $17,256,219. 0.03% of the stock is owned by company insiders.

Analysts Set New Price Targets

A number of research firms recently commented on MSFT. Truist Financial reaffirmed a "buy" rating and issued a $575.00 price objective on shares of Microsoft in a research note on Wednesday, July 22nd. Barclays decreased their target price on shares of Microsoft from $545.00 to $512.00 and set an "overweight" rating for the company in a research report on Thursday, July 30th. CLSA reaffirmed an "outperform" rating on shares of Microsoft in a research note on Thursday, July 30th. Royal Bank Of Canada reaffirmed an "outperform" rating and issued a $640.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. Finally, Deutsche Bank Aktiengesellschaft reiterated a "buy" rating on shares of Microsoft in a research report on Monday, July 20th. Forty-two research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. According to MarketBeat.com, Microsoft presently has a consensus rating of "Moderate Buy" and a consensus price target of $560.27.

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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