Microsoft Corporation (NASDAQ:MSFT) Receives Average Recommendation of "Moderate Buy" from Brokerages

Key Points

• Analysts remain broadly bullish: Microsoft has a “Moderate Buy” consensus from 47 brokerages, including 42 buy ratings, with an average 12-month price target of about $559.
• Quarterly results exceeded expectations: Microsoft reported $4.74 in EPS and $90.01 billion in revenue, surpassing estimates while revenue grew 17.7% year over year.
• Institutional ownership remains strong, with hedge funds and other institutions holding 71.13% of the stock; however, insiders sold 38,572 shares worth approximately $17.8 million during the latest quarter.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) has earned an average rating of "Moderate Buy" from the forty-seven ratings firms that are presently covering the stock, MarketBeat Ratings reports. Five equities research analysts have rated the stock with a hold recommendation and forty-two have issued a buy recommendation on the company. The average twelve-month target price among brokerages that have issued a report on the stock in the last year is $559.1556.

Several equities analysts recently issued reports on MSFT shares. BNP Paribas Exane dropped their price target on Microsoft from $556.00 to $555.00 and set an "outperform" rating on the stock in a research report on Friday, May 1st. Guggenheim reaffirmed a "buy" rating and set a $586.00 price objective on shares of Microsoft in a research report on Monday, July 27th. HSBC lowered their target price on Microsoft from $593.00 to $571.00 in a research note on Thursday, April 30th. Barclays cut their price target on Microsoft from $545.00 to $512.00 and set an "overweight" rating for the company in a research note on Thursday, July 30th. Finally, Phillip Securities downgraded Microsoft from a "strong-buy" rating to a "moderate buy" rating in a report on Monday, August 3rd.

Insider Transactions at Microsoft

In related news, EVP Takeshi Numoto sold 4,810 shares of the firm's stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares in the company, valued at $21,188,276.96. This trade represents a 10.13% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO Judson Althoff sold 10,000 shares of Microsoft 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 completion of the sale, the chief executive officer directly owned 100,447 shares in the company, valued at $49,007,086.83. This represents a 9.05% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 38,572 shares of company stock worth $17,775,330. Company insiders own 0.03% of the company's stock.

Institutional Trading of Microsoft

Hedge funds have recently modified their holdings of the business. Vanguard Group Inc. increased its holdings in shares of Microsoft by 2.3% in the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant's stock valued at $347,211,391,000 after purchasing an additional 15,955,898 shares in the last quarter. State Street Corp lifted its stake in shares of Microsoft by 2.1% in the fourth quarter. State Street Corp now owns 306,150,608 shares of the software giant's stock valued at $148,060,557,000 after purchasing an additional 6,388,930 shares during the period. Geode Capital Management LLC boosted its holdings in Microsoft by 1.1% during the fourth quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant's stock worth $88,056,019,000 after buying an additional 1,911,142 shares in the last quarter. Morgan Stanley boosted its holdings in Microsoft by 0.8% during the fourth quarter. Morgan Stanley now owns 121,220,561 shares of the software giant's stock worth $58,624,690,000 after buying an additional 980,439 shares in the last quarter. Finally, Norges Bank acquired a new position in Microsoft during the fourth quarter worth about $50,664,631,000. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s latest earnings showed stronger-than-expected profitability and revenue, with Azure growth and Copilot adoption reinforcing the view that substantial AI investment is beginning to generate returns. Hedge funds and institutional investors continue to favor Microsoft over some other mega-cap technology names. Hedge Funds Favor Microsoft Over Meta
• Positive Sentiment: Bernstein raised its Microsoft price target to $660 and maintained an Outperform rating, arguing that Microsoft’s data-center expansion is measured, flexible, and supported by durable cloud demand. Other analysts also identified Azure growth, backlog, and institutional buying as potential catalysts for a year-end rally. Bernstein Raises Microsoft Target
• Positive Sentiment: Reports that Microsoft may unveil its Maia 300 AI chip as early as September and secure production capacity for more than 300,000 units could reduce reliance on Nvidia processors, lower long-term AI costs, and support Microsoft’s cloud strategy. Microsoft Maia 300 Chip Report

Microsoft Stock Down 0.4%

Shares of NASDAQ MSFT opened at $503.81 on Wednesday. The business has a 50-day moving average of $407.02 and a two-hundred day moving average of $407.37. The company has a market capitalization of $3.74 trillion, a price-to-earnings ratio of 28.05, a price-to-earnings-growth ratio of 1.63 and a beta of 1.11. Microsoft has a 1 year low of $349.20 and a 1 year 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.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.24 by $0.50. The company had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business's quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the company posted $3.65 earnings per share. On average, analysts forecast that Microsoft will post 19.58 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. The ex-dividend date is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a yield of 0.7%. Microsoft's dividend payout ratio is presently 20.27%.

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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