Saratoga Research & Investment Management Trims Position in Microsoft Corporation $MSFT

Key Points

• Saratoga Research & Investment Management cut its Microsoft position by 9.4% in the second quarter, selling 34,642 shares. Microsoft remains the firm’s fourth-largest holding, representing 6.8% of its portfolio and valued at approximately $124.7 million.
• Microsoft reported stronger-than-expected quarterly results, with $4.74 in earnings per share and $90.01 billion in revenue, while revenue rose 17.7% year over year. Analysts remain broadly bullish, with a “Moderate Buy” consensus rating and an average price target of $569.29.
• The company raised its quarterly dividend by about 8% to $0.98 per share, but investors continue to weigh substantial AI spending, customer concentration and execution risks, alongside restructuring and layoffs in the Xbox business.

Saratoga Research & Investment Management decreased its position in Microsoft Corporation (NASDAQ:MSFT - Free Report) by 9.4% in the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission. The firm owned 334,179 shares of the software giant's stock after selling 34,642 shares during the period. Microsoft makes up 6.8% of Saratoga Research & Investment Management's portfolio, making the stock its 4th largest position. Saratoga Research & Investment Management's holdings in Microsoft were worth $124,655,000 at the end of the most recent quarter.

A number of other large investors have also made changes to their positions in the company. Auto Owners Insurance Co increased its holdings in shares of Microsoft by 56,160.8% in the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock worth $29,073,486,000 after acquiring an additional 60,009,531 shares in the last quarter. Amundi grew its position in shares of Microsoft by 30.8% in the 1st quarter. Amundi now owns 41,675,076 shares of the software giant's stock valued at $15,426,862,000 after purchasing an additional 9,814,598 shares during the period. Fisher Asset Management LLC grew its position in shares of Microsoft by 1.8% in the 4th quarter. Fisher Asset Management LLC now owns 25,300,410 shares of the software giant's stock valued at $12,235,785,000 after purchasing an additional 458,014 shares during the period. Dimensional Fund Advisors LP increased its stake in Microsoft by 10.5% during the 1st 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 in the last quarter. Finally, Hsbc Holdings PLC raised its holdings in Microsoft by 7.8% during the 4th quarter. Hsbc Holdings PLC now owns 22,138,798 shares of the software giant's stock worth $10,715,379,000 after buying an additional 1,599,412 shares during the period. Institutional investors own 71.13% of the company's stock.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on the stock. Rothschild & Co Redburn set a $440.00 price target on shares of Microsoft in a research note on Monday. Royal Bank Of Canada reaffirmed an "outperform" rating on shares of Microsoft in a research report on Thursday, September 10th. CLSA reaffirmed an "outperform" rating on shares of Microsoft in a research note on Thursday, July 30th. Weiss Ratings upgraded Microsoft from a "hold (c)" rating to a "hold (c+)" rating in a report on Thursday, August 27th. Finally, Guggenheim reissued a "buy" rating and issued a $586.00 price target on shares of Microsoft in a research note on Monday, July 27th. Forty-two equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average price target of $569.29.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Analysts raised their outlook. Oppenheimer increased its Microsoft price target to $570 from $515 while maintaining an Outperform rating, citing sustained Azure and Microsoft 365 commercial momentum into fiscal 2027. Cantor Fitzgerald also reportedly raised its target to $608 and kept an Overweight rating. Oppenheimer Microsoft price target article
• Positive Sentiment: Azure has additional growth levers. BNP Paribas said recent Azure strength may not reflect the full opportunity, pointing to higher pricing as contracts renew, capacity expansion and a potential SpaceX cloud relationship. Azure growth has reportedly reached the mid-40% range, supporting the view that AI infrastructure demand can continue driving revenue. BNP Paribas Azure outlook article
• Positive Sentiment: Capital returns remain supportive. Microsoft raised its quarterly dividend approximately 8% to $0.98 per share, extending its dividend-growth streak to more than two decades. The increase signals management confidence, although the modest yield is unlikely to be the primary stock catalyst. Microsoft dividend increase article
• Neutral Sentiment: OpenAI remains both an opportunity and a concentration risk. Microsoft’s AI partner is reportedly seeking a valuation above $1.2 trillion, potentially reinforcing Microsoft’s Azure and Copilot ecosystem. However, projected cash burn of roughly $278 billion and the company’s reliance on Microsoft-supported infrastructure raise questions about customer durability and AI spending economics. OpenAI valuation and Microsoft article
• Negative Sentiment: Xbox layoffs pressured sentiment. Microsoft is cutting approximately 268 Xbox jobs, with broader reports pointing to roughly 500 affected employees, while shifting the next Halo game to Activision. The move highlights a continuing gaming reset and was the clearest near-term reason for weakness in MSFT shares. Microsoft Xbox restructuring article
• Negative Sentiment: AI execution risks remain. Investors continue to monitor heavy capital spending, copyright and regulatory challenges, and concerns that AI revenue is concentrated among a small number of customers. These risks could pressure margins or the valuation if Azure growth fails to meet elevated expectations.

Insider Buying and Selling

In other news, CEO Judson Althoff sold 10,000 shares of the company's stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the sale, the chief executive officer owned 100,447 shares in the company, valued at $49,007,086.83. This represents a 9.05% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this link. Also, EVP Amy Hood sold 41,674 shares of the stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $498.27, for a total value of $20,764,903.98. Following the completion of the sale, the executive vice president directly owned 533,624 shares of the company's stock, valued at approximately $265,888,830.48. The trade was a 7.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 143,009 shares of company stock valued at $71,420,699 in the last ninety days. 0.03% of the stock is owned by company insiders.

Microsoft Stock Down 0.7%

Microsoft stock opened at $498.00 on Wednesday. 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. The company has a fifty day simple moving average of $471.45 and a 200 day simple moving average of $424.28. The company has a market cap of $3.70 trillion, a P/E ratio of 27.73, a price-to-earnings-growth ratio of 1.61 and a beta of 1.11.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping the consensus estimate of $4.24 by $0.50. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The firm had revenue of $90.01 billion for the quarter, compared to analysts' expectations of $87.62 billion. During the same period in the previous year, the firm posted $3.65 EPS. The company's revenue for the quarter was up 17.7% on a year-over-year basis. Research analysts anticipate that Microsoft Corporation will post 19.61 earnings per share for the current fiscal year.

Microsoft Increases Dividend

The business also recently declared 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 annualized dividend and a yield of 0.8%. This is a boost from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date of this dividend is Thursday, November 19th. Microsoft's payout ratio is currently 20.27%.

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices and digital solutions for consumers, businesses and public-sector organizations. Its products and services include the Windows operating system, Microsoft 365 productivity applications, Teams collaboration software, Dynamics business applications and Azure cloud computing services.

The company also operates LinkedIn, GitHub and Xbox, which includes gaming consoles, video games and related online services.

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