Microsoft (NASDAQ:MSFT) Shares Up 1.6% - Time to Buy?

Key Points

• Microsoft shares rose 1.6% in mid-day trading, with volume running above average as the stock touched an intraday high of $392.20. The move came as investors reacted to a mix of upbeat AI-related headlines and ongoing concerns about valuation.
• News flow was mostly positive, including Microsoft’s launch of a $2.5 billion AI deployment company called Frontier and a five-year partnership with Haleon to expand use of Microsoft AI, cloud, and data tools. Analysts continue to view Microsoft as a major long-term beneficiary of enterprise AI and cloud spending.
• There are still headwinds: reports suggest Microsoft may cut thousands of jobs to support heavy AI investment, and some commentary points to its premium valuation as a possible limit on upside. Despite that, Wall Street remains broadly bullish, with 41 analysts rating the stock a Buy and a consensus target price of $560.86.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report)'s share price rose 1.6% during mid-day trading on Thursday . The stock traded as high as $392.20 and last traded at $390.49. 40,718,585 shares were traded during mid-day trading, an increase of 7% from the average session volume of 38,013,617 shares. The stock had previously closed at $384.28.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft launched a new $2.5 billion AI deployment company, Frontier, to embed thousands of experts inside customer organizations and accelerate enterprise AI adoption. Reuters: Microsoft launches firm to help companies adopt AI with $2.5 billion
• Positive Sentiment: Haleon signed a five-year Microsoft partnership to expand use of Microsoft AI, cloud, and data tools, underscoring stronger enterprise demand for Microsoft’s AI stack. Barchart: Haleon Just Struck a Five-Year Deal With Microsoft
• Positive Sentiment: Analysts and commentators continue to argue Microsoft remains a leading long-term AI and cloud beneficiary, with some pointing to Azure’s growing strength versus AWS and attractive valuation after recent weakness. TipRanks: Microsoft (MSFT) Azure Widens Lead over AWS in Jefferies CIO Survey
• Neutral Sentiment: Microsoft is also being mentioned in investor-rights notices and a securities class action, which may add headline noise but does not change fundamentals in the near term. PR Newswire: Microsoft Corporation (MSFT) Shareholders Who Lost Money Have Opportunity to Lead Securities Fraud Lawsuit
• Negative Sentiment: Reports that Microsoft may cut thousands of jobs, including roles in sales, consulting, and Xbox, suggest ongoing cost pressure as the company funds heavy AI investment. Business Insider: Microsoft plans another round of job cuts, impacting thousands of roles
• Negative Sentiment: Some coverage also highlights Microsoft’s premium valuation and lingering concerns about the payoff from its large AI spending, which could limit upside if execution slows. Zacks: Microsoft Trades at a Premium P/E: Buy, Sell or Hold the Stock Now?

Analyst Upgrades and Downgrades

MSFT has been the topic of several analyst reports. Robert W. Baird lowered their price objective on Microsoft from $540.00 to $500.00 and set an "outperform" rating on the stock in a research report on Wednesday, April 15th. Benchmark reissued a "buy" rating and issued a $525.00 target price (up from $450.00) on shares of Microsoft in a report on Tuesday, April 28th. Deutsche Bank Aktiengesellschaft decreased their price target on Microsoft from $575.00 to $550.00 and set a "buy" rating for the company in a research note on Thursday, April 30th. Phillip Securities raised Microsoft to a "buy" rating and set a $485.00 price target on the stock in a report on Wednesday, May 13th. Finally, UBS Group reaffirmed a "buy" rating on shares of Microsoft in a research report on Friday, April 24th. Forty-one analysts have rated the stock with a Buy rating and six have given a Hold rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $560.86.

Microsoft Stock Up 1.6%

The company's 50 day moving average price is $407.66 and its two-hundred day moving average price is $418.67. The company has a current ratio of 1.28, a quick ratio of 1.27 and a debt-to-equity ratio of 0.08. The firm has a market cap of $2.90 trillion, a PE ratio of 23.24, a PEG ratio of 1.34 and a beta of 1.13.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, topping analysts' consensus estimates of $4.06 by $0.21. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company had revenue of $82.89 billion for the quarter, compared to analysts' expectations of $81.44 billion. During the same period last year, the firm earned $3.46 EPS. Microsoft's revenue for the quarter was up 18.3% compared to the same quarter last year. On average, equities research analysts expect that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft's payout ratio is presently 21.67%.

Insider Buying and Selling

In other Microsoft news, EVP Takeshi Numoto sold 4,500 shares of Microsoft stock in a transaction that occurred 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 $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Amy Coleman sold 1,262 shares of the company's stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $411.34, for a total transaction of $519,111.08. Following the completion of the transaction, the executive vice president owned 46,003 shares of the company's stock, valued at approximately $18,922,874.02. The trade was a 2.67% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 23,762 shares of company stock valued at $10,508,361. 0.03% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the company. Norges Bank purchased a new stake in Microsoft during the 4th quarter valued at approximately $50,664,631,000. Auto Owners Insurance Co boosted its position in shares of Microsoft by 56,160.8% during the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock worth $29,073,486,000 after acquiring an additional 60,009,531 shares during the last quarter. Nuveen LLC bought a new position in shares of Microsoft during the first quarter worth $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in Microsoft by 500.0% during the third 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 holdings in Microsoft by 49,640.3% in the 2nd 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 last quarter. Institutional investors own 71.13% of the company's stock.

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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