Scarborough Advisors LLC Lowers Stock Position in Microsoft Corporation $MSFT

Key Points

• Scarborough Advisors cut its Microsoft stake by 78.1% in the second quarter, selling 17,524 shares and retaining 4,911 shares valued at approximately $1.92 million. Institutional investors and hedge funds still own 71.13% of Microsoft.
• Analysts remain broadly bullish, with 42 Buy ratings and five Holds, an overall “Moderate Buy” consensus, and an average price target of $564.27. Microsoft also exceeded quarterly expectations with $4.74 in earnings per share and $90.01 billion in revenue.
• Microsoft raised its quarterly dividend from $0.91 to $0.98 per share, but investors continue to monitor elevated AI infrastructure spending and whether future returns will justify the investment.

Scarborough Advisors LLC trimmed its holdings in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 78.1% in the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 4,911 shares of the software giant's stock after selling 17,524 shares during the period. Scarborough Advisors LLC's holdings in Microsoft were worth $1,920,000 at the end of the most recent reporting period.

Several other hedge funds have also modified their holdings of the business. Midwest Financial Group LLC increased its stake in Microsoft by 6.4% in the 2nd quarter. Midwest Financial Group LLC now owns 10,663 shares of the software giant's stock valued at $3,977,000 after purchasing an additional 640 shares in the last quarter. Pearl Planning LLC grew its holdings in Microsoft by 5.5% in the second quarter. Pearl Planning LLC now owns 1,145 shares of the software giant's stock valued at $427,000 after purchasing an additional 60 shares during the last quarter. Crown Wealth Group LLC grew its holdings in Microsoft by 5.4% in the second quarter. Crown Wealth Group LLC now owns 25,392 shares of the software giant's stock valued at $9,472,000 after purchasing an additional 1,304 shares during the last quarter. Hofer & Associates. Inc increased its position in shares of Microsoft by 5.8% in the second quarter. Hofer & Associates. Inc now owns 7,038 shares of the software giant's stock valued at $2,625,000 after buying an additional 388 shares in the last quarter. Finally, Washington Capital Management Inc. increased its position in shares of Microsoft by 37.9% in the second quarter. Washington Capital Management Inc. now owns 1,855 shares of the software giant's stock valued at $692,000 after buying an additional 510 shares in the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

Analysts Set New Price Targets

Several equities research analysts recently commented on the stock. Truist Financial reiterated a "buy" rating and issued a $575.00 price objective on shares of Microsoft in a research report on Wednesday, July 22nd. Royal Bank Of Canada restated an "outperform" rating on shares of Microsoft in a report on Thursday, September 10th. Piper Sandler upped their price target on shares of Microsoft from $540.00 to $550.00 and gave the company an "overweight" rating in a report on Tuesday, July 28th. Morgan Stanley reiterated an "overweight" rating on shares of Microsoft in a research report on Thursday, July 30th. Finally, Bank of America raised their price objective on shares of Microsoft from $500.00 to $600.00 and gave the stock a "buy" rating in a research note on Tuesday, September 1st. Forty-two equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $564.27.

Microsoft Price Performance

Microsoft stock opened at $490.30 on Thursday. The stock has a market capitalization of $3.64 trillion, a P/E ratio of 27.30, a P/E/G ratio of 1.60 and a beta of 1.11. Microsoft Corporation has a 12-month low of $349.20 and a 12-month high of $553.72. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The firm's 50-day moving average is $462.53 and its two-hundred day moving average is $421.53.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share for the quarter, beating analysts' consensus estimates of $4.24 by $0.50. The business had revenue of $90.01 billion during 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 company's revenue was up 17.7% on a year-over-year basis. During the same quarter in the previous year, the business posted $3.65 earnings per share. Equities analysts predict that Microsoft Corporation will post 19.61 earnings per share for the current year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Thursday, November 19th will be issued a $0.98 dividend. This is a boost from Microsoft's previous quarterly dividend of $0.91. The ex-dividend date is Thursday, November 19th. This represents a $3.92 annualized dividend and a yield of 0.8%. Microsoft's payout ratio is presently 20.27%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Dividend raised 8%: Microsoft increased its quarterly payout from $0.91 to $0.98 per share, payable December 10 to shareholders of record November 19. The increase signals confidence in cash generation and brings the annualized yield to approximately 0.8%, while the payout ratio remains near 20%. Microsoft announces quarterly dividend increase
• Positive Sentiment: Azure momentum remains a key catalyst: Azure revenue growth accelerated to 43% year over year in the latest quarter, with management expecting another acceleration. Azure has also surpassed $100 billion in annual sales, reinforcing the investment case for Microsoft’s cloud and agentic-AI strategy. Microsoft Azure agentic AI growth
• Positive Sentiment: Enterprise AI ecosystem is expanding: Dun & Bradstreet is integrating its commercial data graph with Microsoft Copilot Studio and Dynamics 365 agents, potentially supporting broader enterprise adoption of Microsoft’s AI tools. Dun and Bradstreet Microsoft Copilot integration
• Neutral Sentiment: Upcoming product and reporting updates: Microsoft’s October 7 Windows and Surface event could provide a hardware and on-device AI catalyst. Separately, plans to disclose Azure revenue should give investors greater visibility into whether AI spending is translating into sales. Microsoft Windows and Surface event
• Negative Sentiment: AI spending is the main overhang: Microsoft is reportedly targeting roughly 38 gigawatts of data-center capacity by 2032, while capital expenditures are already elevated and expected to rise again. Investors are concerned that returns from AI infrastructure may take time to materialize. Microsoft AI spending analysis
• Negative Sentiment: AI execution concerns persist: Federal agencies can begin contracting for Microsoft’s new AI government tier on October 1, but some features may not be available immediately. The gap between commitments and delivery could slow adoption or raise questions about execution. Microsoft government AI tier
• Negative Sentiment: Insider selling adds a modest headwind: EVP Amy Hood sold 41,674 shares worth approximately $20.8 million under a pre-arranged Rule 10b5-1 plan. Because the transaction was scheduled in advance, it is not necessarily a bearish signal, but it may weigh marginally on sentiment.

Insiders Place Their Bets

In related news, CEO Judson Althoff sold 10,000 shares of the firm's stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total value of $4,878,900.00. Following the sale, the chief executive officer directly owned 100,447 shares of the company's stock, valued at approximately $49,007,086.83. This trade represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Satya Nadella sold 86,525 shares of the business's stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the completion of the sale, the chief executive officer owned 486,763 shares of the company's stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. 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. In the last quarter, insiders sold 143,009 shares of company stock worth $71,420,699. 0.03% of the stock is owned by company insiders.

Microsoft Company Profile

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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