South Street Advisors LLC Reduces Holdings in Microsoft Corporation $MSFT

Key Points

• South Street Advisors reduced its Microsoft stake by 43.5% in the second quarter, selling 31,442 shares and retaining 40,785 shares valued at approximately $15.2 million.
• Microsoft reported strong quarterly results, with EPS of $4.74 and revenue of $90.01 billion, surpassing estimates and marking 17.7% year-over-year revenue growth. The company also raised its quarterly dividend to $0.98 per share.
• Analyst sentiment remains bullish: 43 analysts rate Microsoft a Buy, with an average price target of $571.18, although risks include elevated valuation and heavy AI infrastructure spending.

South Street Advisors LLC cut its stake in shares of Microsoft Corporation (NASDAQ:MSFT - Free Report) by 43.5% during the second quarter, according to the company in its most recent Form 13F filing with the SEC. The firm owned 40,785 shares of the software giant's stock after selling 31,442 shares during the quarter. Microsoft makes up approximately 2.0% of South Street Advisors LLC's holdings, making the stock its 22nd biggest holding. South Street Advisors LLC's holdings in Microsoft were worth $15,214,000 at the end of the most recent reporting period.

Other hedge funds have also made changes to their positions in the company. Bank Hapoalim BM grew its holdings in Microsoft by 17.4% in the second quarter. Bank Hapoalim BM now owns 34,242 shares of the software giant's stock worth $12,773,000 after purchasing an additional 5,077 shares during the last quarter. Red Lighthouse Investment Management LLC raised its stake in shares of Microsoft by 1.1% during the 2nd quarter. Red Lighthouse Investment Management LLC now owns 15,420 shares of the software giant's stock valued at $5,752,000 after buying an additional 173 shares during the last quarter. Juno Financial Group LLC lifted its holdings in Microsoft by 5.4% in the second quarter. Juno Financial Group LLC now owns 14,775 shares of the software giant's stock valued at $5,511,000 after acquiring an additional 756 shares during the period. North Dakota State Investment Board raised its position in shares of Microsoft by 1.9% in the second quarter. North Dakota State Investment Board now owns 219,052 shares of the software giant's stock worth $81,711,000 after acquiring an additional 4,146 shares during the period. Finally, Aviso Wealth Management grew its stake in Microsoft by 2.2% in the 2nd quarter. Aviso Wealth Management now owns 19,643 shares of the software giant's stock valued at $7,327,000 after acquiring an additional 429 shares during the period. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Microsoft Stock Performance

NASDAQ:MSFT opened at $517.53 on Friday. Microsoft Corporation has a fifty-two week low of $349.20 and a fifty-two week high of $553.72. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a 50 day moving average price of $490.08 and a 200 day moving average price of $429.97. The stock has a market capitalization of $3.84 trillion, a P/E ratio of 28.82, a PEG ratio of 1.65 and a beta of 1.10.

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 (EPS) 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 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 quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter in the previous year, the business earned $3.65 EPS. Equities research analysts forecast that Microsoft Corporation will post 19.62 EPS for the current year.

Microsoft Increases Dividend

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

Insider Buying and Selling

In other news, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction dated Tuesday, September 1st. The stock was 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 owned 486,763 shares in the company, valued at approximately $244,092,173.98. This trade represents a 15.09% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, 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 transaction of $4,878,900.00. Following the completion of the sale, the chief executive officer directly owned 100,447 shares in the company, valued at approximately $49,007,086.83. This trade represents a 9.05% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 143,009 shares of company stock worth $71,420,699 over the last 90 days. 0.03% of the stock is currently owned by company insiders.

Analyst Upgrades and Downgrades

MSFT has been the subject of a number of research analyst reports. TD Cowen reissued a "buy" rating and set a $540.00 target price on shares of Microsoft in a report on Thursday, July 30th. Royal Bank Of Canada reaffirmed an "outperform" rating on shares of Microsoft in a research note on Thursday, September 10th. Sanford C. Bernstein set a $660.00 price target on Microsoft in a research report on Monday, August 10th. CLSA restated an "outperform" rating on shares of Microsoft in a report on Thursday, July 30th. Finally, Tigress Financial lifted their target price on shares of Microsoft from $680.00 to $690.00 and gave the stock a "buy" rating in a research note on Wednesday, August 5th. Forty-three analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $571.18.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure and AI demand remain the primary catalyst. Investor data and analyst commentary point to accelerating Azure demand, while Microsoft’s recent earnings showed its fastest cloud growth in four years. The improving demand is helping ease concerns that the company’s substantial AI infrastructure spending will not generate adequate returns. Ca$htag: MSFT Azure Cloud Drives Soaring Demand
• Positive Sentiment: Wells Fargo added Microsoft to its Q4 Tactical Ideas list and raised its price target to $725, citing Azure’s growth potential and the prospect of improved AI monetization through Copilot. The action adds to a series of bullish analyst revisions; one report noted that 52 analysts covering Microsoft currently have no sell ratings. With Azure as a Catalyst, Microsoft Is Positioned for Sustained Growth
• Positive Sentiment: Microsoft’s OpenAI relationship provides potential additional value. Investors are increasingly focused on Microsoft’s stake and commercial partnership with OpenAI, particularly ahead of a possible OpenAI initial public offering that could provide a market reference for the investment. OpenAI’s Future IPO Keeps Me Buying Microsoft
• Positive Sentiment: Microsoft introduced new real-time AI speech models for customer-service agents, multilingual assistants and voice interfaces. The products broaden Microsoft’s enterprise AI offering and could support additional cloud consumption and software revenue. Microsoft Targets Contact Center Market With Real-Time AI Voice Models
• Neutral Sentiment: Investors are awaiting Microsoft’s October 7 Surface and Windows event. New hardware or Windows updates could support the ecosystem, although the event has not yet produced a material earnings catalyst. Microsoft Stock Notches Up Ahead of the Surface Show
• Negative Sentiment: Risks include heavy AI capital spending, valuation concerns and broader market concentration. Critics argue that rising data-center capacity could pressure compute pricing and returns, while strategists warn that a market correction could disproportionately affect megacap technology stocks. Microsoft’s dividend remains affordable, but AI infrastructure spending and lease commitments could limit future dividend growth. Morgan Stanley Strategist Sees Market Drawdown Potential

Microsoft Company Profile

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft's productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.

Want to see what other hedge funds are holding MSFT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Microsoft Corporation (NASDAQ:MSFT - Free Report).

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.