Microsoft (NASDAQ:MSFT) Earns "Buy" Rating from TD Cowen

Key Points

• TD Cowen reaffirmed its Buy rating on Microsoft and set a $540 price target, implying roughly 21% upside from the prior close. Analysts overall maintain a Moderate Buy consensus with an average target of $556.76.
• Microsoft delivered a strong quarterly performance, reporting $4.74 in EPS and $90.01 billion in revenue, ahead of analyst estimates. Revenue increased 17.7% year over year, while Azure growth reached 43% and annual Azure revenue exceeded $100 billion.
• Shares rose 14.3% to $446.22 following the results, supported by improving AI monetization and more than 30 million paid Microsoft 365 Copilot seats. Regulatory, cybersecurity and legal risks remain potential headwinds.

Microsoft (NASDAQ:MSFT - Get Free Report)'s stock had its "buy" rating reissued by stock analysts at TD Cowen in a research note issued on Thursday,Benzinga reports. They currently have a $540.00 price target on the software giant's stock. TD Cowen's price target would indicate a potential upside of 21.02% from the company's previous close.

Several other analysts also recently issued reports on the company. DZ Bank reiterated a "buy" rating on shares of Microsoft in a research note on Thursday, April 30th. Evercore set a $528.00 target price on Microsoft in a research report on Thursday. Benchmark reiterated a "buy" rating on shares of Microsoft in a report on Friday, July 24th. President Capital lifted their price target on shares of Microsoft from $500.00 to $520.00 and gave the company a "buy" rating in a research report on Thursday, April 30th. Finally, The Goldman Sachs Group restated a "buy" rating and issued a $640.00 price objective on shares of Microsoft in a research note on Thursday. Forty-two analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat.com, Microsoft presently has an average rating of "Moderate Buy" and a consensus price target of $556.76.

Microsoft Stock Up 14.3%

Shares of MSFT traded up $55.68 during midday trading on Thursday, reaching $446.22. 58,732,050 shares of the stock were exchanged, compared to its average volume of 37,205,906. The company has a market cap of $3.31 trillion, a price-to-earnings ratio of 26.47, a P/E/G ratio of 1.20 and a beta of 1.13. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08. Microsoft has a 12-month low of $349.20 and a 12-month high of $555.45. The firm has a 50 day simple moving average of $396.43 and a 200-day simple moving average of $405.74.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion during the quarter, compared to analysts' expectations of $87.62 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The firm's quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter in the previous year, the business posted $3.65 EPS. Research analysts forecast that Microsoft will post 16.7 EPS for the current year.

Insider Activity

In related news, CEO Judson Althoff sold 15,500 shares of the business's stock in a transaction on Monday, June 1st. The shares were sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the transaction, the chief executive officer owned 110,477 shares of the company's stock, valued at approximately $50,928,792.23. The trade was a 12.30% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, EVP Takeshi Numoto sold 4,500 shares of the company's stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the transaction, the executive vice president owned 47,468 shares of the company's stock, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 23,762 shares of company stock valued at $10,508,361. 0.03% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in MSFT. Norges Bank bought a new position in Microsoft in the fourth quarter worth $50,664,631,000. Auto Owners Insurance Co increased its holdings in Microsoft by 56,160.8% in the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock valued at $29,073,486,000 after buying an additional 60,009,531 shares during the period. Nuveen LLC acquired a new position in shares of Microsoft in the 1st quarter valued at $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its position in shares of Microsoft by 500.0% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant's stock valued at $30,840,432,000 after acquiring an additional 49,618,571 shares in the last quarter. Finally, Laurel Wealth Advisors LLC increased its stake in Microsoft by 49,640.3% in the second quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant's stock valued at $14,905,904,000 after acquiring an additional 29,906,791 shares during the period. Institutional investors own 71.13% of the company's stock.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings beat: Microsoft reported $4.74 in adjusted EPS versus the $4.24 consensus and $90.01 billion in revenue versus estimates of $87.62 billion. Revenue rose 17.7% year over year, while profit increased substantially. Microsoft Beats Wall Street Expectations, With 31% Jump in Profits
• Positive Sentiment: Azure momentum exceeded expectations: Azure revenue grew 43%, ahead of forecasts near 40%, and annual Azure revenue surpassed $100 billion for the first time. Intelligent Cloud revenue rose 32% to $39.3 billion, reinforcing Microsoft’s position as a leading beneficiary of enterprise AI demand. Microsoft Tops Quarterly Cloud Growth Estimates
• Positive Sentiment: AI monetization is improving: Microsoft 365 Copilot surpassed 30 million paid seats, while management described a shift toward usage-based “per seat plus consumption” revenue. Investors viewed the Azure and Copilot adoption figures as evidence that AI spending is beginning to generate returns. Microsoft Says AI Growth Will Depend on Usage
• Positive Sentiment: Spending concerns eased: Microsoft held its capital-expenditure outlook steady rather than following peers with another increase. Management also said GPU investment can be slowed if demand weakens, while the company expects healthy cash generation. Analysts responded with multiple price-target increases, including BMO’s move to $515 and Goldman Sachs’ move to $640. Microsoft Keeps Capex Forecast Unchanged
• Neutral Sentiment: The results helped lift broader technology and AI-related stocks, including clean-energy and power companies viewed as suppliers to data-center expansion. This supports sentiment toward Microsoft’s ecosystem but does not directly change Microsoft’s fundamentals. Plug Power Stock Jumps as Microsoft Earnings Spotlight AI Energy Demand
• Negative Sentiment: Risks remain: Microsoft faces a reported cloud-security flaw that could have exposed customers, a U.K. investigation into Microsoft 365 subscription marketing, and several shareholder securities lawsuits. These issues were overshadowed by the earnings beat but could create regulatory, legal, or reputational costs. Wiz Reports Potential Microsoft Cloud Flaw

About Microsoft

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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