Investors Buy Large Volume of Microsoft Call Options (NASDAQ:MSFT)

Key Points

• On Friday, investors bought 398,814 call options for Microsoft, marking a 30% increase compared to the average daily volume of 306,201 options.
• Analysts have raised their price targets for Microsoft, with upgrades from firms like Mizuho and Wells Fargo, forecasting prices between $625.00 and $650.00.
• The company recently announced a quarterly dividend of $0.83, with a payout ratio of 24.34% and a yield of 0.7% for shareholders of record.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) was the target of unusually large options trading activity on Friday. Stock investors acquired 398,814 call options on the stock. Thisrepresentsanincreaseofapproximately30% compared to the average daily volume of 306,201 call options.

Analyst Upgrades and Downgrades

Several equities research analysts have recently commented on MSFT shares. Mizuho boosted their price target on Microsoft from $540.00 to $625.00 and gave the stock an "outperform" rating in a research note on Thursday, July 31st. Wells Fargo & Company reiterated an "overweight" rating and issued a $650.00 price target (up from $600.00) on shares of Microsoft in a report on Thursday, July 31st. TD Cowen raised their target price on shares of Microsoft from $580.00 to $640.00 and gave the stock a "buy" rating in a research report on Thursday, July 31st. Cantor Fitzgerald raised their target price on shares of Microsoft from $581.00 to $639.00 and gave the stock an "overweight" rating in a research report on Thursday, July 31st. Finally, The Goldman Sachs Group lifted their price target on shares of Microsoft from $480.00 to $550.00 and gave the company a "buy" rating in a research report on Wednesday, May 21st. One research analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and two have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $612.54.

Insiders Place Their Bets

In other news, CEO Satya Nadella sold 149,205 shares of Microsoft stock in a transaction on Wednesday, September 3rd. The shares were sold at an average price of $504.78, for a total value of $75,315,699.90. Following the transaction, the chief executive officer directly owned 790,852 shares of the company's stock, valued at $399,206,272.56. The trade was a 15.87% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, EVP Takeshi Numoto sold 4,850 shares of the firm's stock in a transaction dated Tuesday, August 12th. The stock was sold at an average price of $527.32, for a total value of $2,557,502.00. Following the transaction, the executive vice president directly owned 39,111 shares in the company, valued at approximately $20,624,012.52. This represents a 11.03% decrease in their position. The disclosure for this sale can be found here. Insiders own 0.03% of the company's stock.

Institutional Trading of Microsoft

Hedge funds have recently made changes to their positions in the stock. Vanguard Group Inc. raised its position in Microsoft by 2.0% during the second quarter. Vanguard Group Inc. now owns 705,077,786 shares of the software giant's stock valued at $350,712,742,000 after acquiring an additional 13,691,572 shares in the last quarter. State Street Corp raised its position in Microsoft by 1.1% during the second quarter. State Street Corp now owns 299,196,519 shares of the software giant's stock valued at $148,823,341,000 after acquiring an additional 3,166,275 shares in the last quarter. Geode Capital Management LLC raised its position in shares of Microsoft by 2.0% in the second quarter. Geode Capital Management LLC now owns 179,001,751 shares of the software giant's stock valued at $88,714,256,000 after purchasing an additional 3,532,054 shares during the period. Norges Bank bought a new position in shares of Microsoft in the fourth quarter valued at approximately $44,343,058,000. Finally, Kingstone Capital Partners Texas LLC raised its holdings in Microsoft by 564,387.1% in the 2nd quarter. Kingstone Capital Partners Texas LLC now owns 90,549,369 shares of the software giant's stock worth $45,040,162,000 after acquiring an additional 90,533,328 shares during the period. 71.13% of the stock is owned by hedge funds and other institutional investors.

Microsoft Stock Performance

MSFT stock traded down $13.56 during trading on Friday, hitting $494.41. 26,246,935 shares of the company's stock traded hands, compared to its average volume of 22,213,205. The stock has a fifty day moving average price of $509.95 and a two-hundred day moving average price of $450.01. Microsoft has a 52 week low of $344.79 and a 52 week high of $555.45. The stock has a market capitalization of $3.68 trillion, a price-to-earnings ratio of 36.25, a price-to-earnings-growth ratio of 2.21 and a beta of 1.04. The company has a quick ratio of 1.35, a current ratio of 1.35 and a debt-to-equity ratio of 0.12.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, July 30th. The software giant reported $3.65 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $3.35 by $0.30. Microsoft had a net margin of 36.15% and a return on equity of 32.44%. The firm had revenue of $76.44 billion during the quarter, compared to analyst estimates of $73.79 billion. During the same quarter in the prior year, the firm posted $2.95 EPS. Microsoft's revenue was up 18.1% compared to the same quarter last year. Microsoft has set its Q1 2026 guidance at EPS. As a group, equities analysts anticipate that Microsoft will post 13.08 EPS for the current fiscal year.

Microsoft Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 11th. Shareholders of record on Thursday, August 21st will be issued a $0.83 dividend. This represents a $3.32 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 21st. Microsoft's dividend payout ratio (DPR) is presently 24.34%.

About Microsoft

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.

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