Rheos Capital Works Inc. Lowers Position in Microsoft Corporation $MSFT

Key Points

• Rheos Capital Works trimmed its Microsoft position by 20.9% in Q4, selling 22,500 shares and reducing its holding to 85,300 shares valued at about $41.25 million (≈2.6% of the fund, its 11th-largest position).
• Microsoft is seeing positive momentum from AI and enterprise deals — including OpenAI’s ChatGPT Images 2.0 and deeper Azure/Copilot deployments — but faces a material legal risk after a U.K. tribunal allowed a £2.1 billion (~$2.8B) mass lawsuit over Windows Server licensing.
• Insider activity was mixed: EVP Kathleen T. Hogan sold 12,321 shares (~$5.05M) while Director John W. Stanton purchased 5,000 shares, signaling divergent insider moves.

Rheos Capital Works Inc. trimmed its holdings in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 20.9% in the 4th quarter, according to its most recent disclosure with the SEC. The fund owned 85,300 shares of the software giant's stock after selling 22,500 shares during the period. Microsoft makes up approximately 2.6% of Rheos Capital Works Inc.'s holdings, making the stock its 11th largest position. Rheos Capital Works Inc.'s holdings in Microsoft were worth $41,253,000 as of its most recent SEC filing.

Other large investors have also recently made changes to their positions in the company. Longfellow Investment Management Co. LLC lifted its holdings in shares of Microsoft by 51.3% during the second 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 during the last quarter. Bayforest Capital Ltd purchased a new position in Microsoft in the 3rd quarter worth approximately $38,000. Sellwood Investment Partners LLC purchased a new position in Microsoft in the 3rd quarter worth approximately $49,000. University of Illinois Foundation purchased a new position in Microsoft in the 2nd quarter worth approximately $50,000. Finally, Stance Capital LLC purchased a new position in Microsoft in the 3rd quarter worth approximately $54,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Insider Buying and Selling

In other Microsoft news, EVP Kathleen T. Hogan sold 12,321 shares of Microsoft stock in a transaction that occurred on Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the sale, the executive vice president owned 137,933 shares of the company's stock, valued at approximately $56,486,322.16. The trade was a 8.20% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director John W. Stanton bought 5,000 shares of the business's stock in a transaction on Wednesday, February 18th. The stock was bought at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the transaction, the director owned 83,905 shares in the company, valued at $33,339,651.75. This trade represents a 6.34% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders own 0.03% of the company's stock.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: OpenAI (backed by Microsoft) launched ChatGPT Images 2.0 — improvements to OpenAI’s image capabilities strengthen the product ecosystem that Microsoft leverages via its OpenAI partnership and Azure hosting, supporting longer-term AI revenue opportunities. OpenAI Launches ChatGPT Images 2.0 – Here’s What You Need to KnowArticle
• Positive Sentiment: Large enterprise deals deepen Azure and Microsoft 365 Copilot adoption — a five-year collaboration with Stellantis and industrial showcases at Hannover Messe (and Accenture partnerships) signal expanding, sticky enterprise AI workflows that drive cloud consumption and services revenue. Microsoft Deepens Industrial AI Role With Stellantis And Hannover Messe DealsArticle
• Positive Sentiment: Accenture’s agentic factory system debuts with Microsoft integrations — another indicator of enterprise traction for Azure-based AI platforms and professional services monetization. Accenture's New Agentic Factory System Debuts With MicrosoftArticle
• Neutral Sentiment: Investor chatter and analysts expect a rebound into earnings: social-media buzz and many buy ratings highlight Azure growth and AI backlog optimism ahead of Microsoft’s April 29 report — but the stock has drawn intense debate about valuation and execution. Microsoft Stock (MSFT) Opinions on Rebound Ahead of EarningsArticle
• Neutral Sentiment: Xbox Game Pass price cut — the new Xbox leadership is trimming subscription prices to boost engagement; could lift user growth and retention but may compress near-term gaming revenue/margins. Microsoft cuts Game Pass subscription prices after new Xbox CEO promises to 'recommit' to gamersArticle
• Neutral Sentiment: Citigroup trimmed its MSFT price target from $635 to $600 but kept a buy rating — a reminder that analyst targets are being adjusted while consensus remains constructive (median targets still well above current levels). Finviz — Citigroup price target noteArticle
• Negative Sentiment: U.K. tribunal ruled Microsoft must face a £2.1B (~$2.8B) mass lawsuit alleging overcharging for Windows Server licenses on rival clouds — a sizeable litigation risk that could lead to material settlements and heightened regulatory/legal scrutiny. Microsoft must face $2.8 billion UK lawsuit over cloud computing licencesArticle
• Negative Sentiment: Analysis piece flags scrutiny of Microsoft’s AI investments and capital intensity — investors may worry about the pace, returns and governance of large AI capex and partnerships, which can pressure near-term margins and share performance. Microsoft AI Investments Face ScrutinyArticle

Microsoft Trading Up 1.5%

NASDAQ:MSFT opened at $424.16 on Wednesday. The company has a current ratio of 1.39, a quick ratio of 1.38 and a debt-to-equity ratio of 0.09. Microsoft Corporation has a 12 month low of $356.28 and a 12 month high of $555.45. The company has a market cap of $3.15 trillion, a PE ratio of 26.53, a price-to-earnings-growth ratio of 1.58 and a beta of 1.11. The company has a 50 day simple moving average of $392.16 and a two-hundred day simple moving average of $452.23.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, topping analysts' consensus estimates of $3.86 by $0.28. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The business had revenue of $81.27 billion during the quarter, compared to the consensus estimate of $80.28 billion. During the same quarter in the previous year, the firm posted $3.23 EPS. The firm's revenue was up 16.7% on a year-over-year basis. Research analysts forecast that Microsoft Corporation will post 16.54 earnings per share for the current year.

Microsoft Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a yield of 0.9%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft's payout ratio is 22.76%.

Wall Street Analysts Forecast Growth

A number of equities analysts recently weighed in on the stock. Wells Fargo & Company decreased their price objective on shares of Microsoft from $630.00 to $615.00 and set an "overweight" rating for the company in a report on Thursday, January 29th. DZ Bank restated a "buy" rating on shares of Microsoft in a report on Thursday, January 29th. Stifel Nicolaus restated a "hold" rating and issued a $392.00 price objective (down from $540.00) on shares of Microsoft in a report on Thursday, February 5th. Piper Sandler decreased their price objective on shares of Microsoft from $600.00 to $500.00 and set an "overweight" rating for the company in a report on Tuesday, April 14th. Finally, Morgan Stanley restated an "overweight" rating on shares of Microsoft in a report on Thursday, January 29th. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and five have given a Hold rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $576.66.

Microsoft Company 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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