Microsoft Target of Unusually Large Options Trading (NASDAQ:MSFT)

Key Points

• Microsoft saw unusually heavy options activity on Friday, with investors buying 1,189,283 call options — about 53% above the typical daily volume.
• Analysts remain broadly bullish on the stock, with 39 Buy ratings and 7 Hold ratings; the consensus price target is $560.88 even as some firms recently adjusted their targets.
• Microsoft’s fundamentals remain strong, as the company beat earnings and revenue estimates in its latest quarter and also announced a quarterly dividend of $0.91 per share, payable June 11.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) was the target of some unusual options trading activity on Friday. Investors acquired 1,189,283 call options on the company. This represents an increase of 53% compared to the typical daily volume of 776,749 call options.

Analysts Set New Price Targets

MSFT has been the topic of a number of analyst reports. Daiwa Securities Group cut their price target on shares of Microsoft from $630.00 to $600.00 and set a "buy" rating on the stock in a research report on Wednesday, February 4th. Wells Fargo & Company increased their price target on shares of Microsoft from $615.00 to $625.00 and gave the company an "overweight" rating in a research report on Thursday, April 30th. JPMorgan Chase & Co. cut their price target on shares of Microsoft from $575.00 to $550.00 and set an "overweight" rating on the stock in a research report on Thursday, January 29th. Citigroup increased their price target on shares of Microsoft from $600.00 to $620.00 and gave the company a "buy" rating in a research report on Thursday, April 30th. Finally, Benchmark reiterated a "buy" rating and issued a $525.00 price target (up from $450.00) on shares of Microsoft in a research report on Tuesday, April 28th. Thirty-nine equities research analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $560.88.

Microsoft Stock Up 3.0%

NASDAQ MSFT traded up $12.16 during trading hours on Friday, reaching $421.59. 36,287,936 shares of the company's stock were exchanged, compared to its average volume of 35,435,422. The company's 50-day moving average is $397.84 and its two-hundred day moving average is $441.52. Microsoft has a one year low of $356.28 and a one year high of $555.45. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The company has a market capitalization of $3.13 trillion, a price-to-earnings ratio of 25.20, a price-to-earnings-growth ratio of 1.46 and a beta of 1.10.

Microsoft (NASDAQ:MSFT - Get Free Report) last posted its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (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 business had revenue of $82.89 billion during the quarter, compared to analysts' expectations of $81.44 billion. During the same period in the prior year, the business earned $3.46 EPS. Microsoft's revenue for the quarter was up 18.3% compared to the same quarter last year. On average, analysts forecast that Microsoft will post 16.76 EPS for the current fiscal year.

Microsoft Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 dividend on an annualized basis and a yield of 0.9%. Microsoft's dividend payout ratio is 21.67%.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Bill Ackman disclosed a new stake in Microsoft and said the stock looks attractively valued, which is boosting sentiment around MSFT. Bill Ackman says he built Microsoft position in first quarter
• Positive Sentiment: Several articles highlighted Microsoft’s AI and cloud strengths, including expectations that Azure, Copilot, and enterprise software remain key long-term growth drivers. Microsoft Buy Rating Reiterated as AI and Cloud Momentum Builds
• Positive Sentiment: Wedbush and other commentators pointed to the OpenAI deal changes as improving Microsoft’s cash flow visibility and supporting the AI investment case. Microsoft (MSFT) Stock Surges to $575 Target as Wedbush Applauds OpenAI Partnership Overhaul
• Neutral Sentiment: Microsoft also faced headlines about a new UK antitrust probe into its business software, which adds regulatory overhang but does not yet change the core investment story. UK opens antitrust probe into Microsoft's business software
• Negative Sentiment: LinkedIn, which is owned by Microsoft, announced layoffs, reinforcing that Microsoft is still making efficiency cuts even as it spends heavily on AI infrastructure. Exclusive: Microsoft eyeing startup deals for life after OpenAI

Insider Buying and Selling

In other news, Director John W. Stanton purchased 5,000 shares of the business's stock in a transaction that occurred on Wednesday, February 18th. The shares were acquired at an average cost of $397.35 per share, for a total transaction of $1,986,750.00. Following the transaction, the director directly owned 83,905 shares of the company's stock, valued at approximately $33,339,651.75. The trade was a 6.34% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available at this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the stock in a transaction that occurred on Friday, March 6th. The shares were sold at an average price of $409.52, for a total transaction of $5,045,695.92. Following the completion of the sale, the executive vice president owned 137,933 shares in the company, valued at $56,486,322.16. This represents a 8.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 0.03% of the company's stock.

Hedge Funds Weigh In On Microsoft

Large investors have recently bought and sold shares of the company. WFA Asset Management Corp grew its stake in shares of Microsoft by 27.0% in the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock valued at $427,000 after buying an additional 216 shares in the last quarter. Ironwood Wealth Management LLC. grew its stake in shares of Microsoft by 0.3% in the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock valued at $5,658,000 after buying an additional 38 shares in the last quarter. Discipline Wealth Solutions LLC grew its stake in shares of Microsoft by 410.4% in the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock valued at $1,144,000 after buying an additional 2,138 shares in the last quarter. Wealth Group Ltd. grew its stake in shares of Microsoft by 1.2% in the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant's stock valued at $1,000,000 after buying an additional 28 shares in the last quarter. Finally, Eagle Capital Management LLC grew its stake in shares of Microsoft by 0.4% in the fourth quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant's stock valued at $9,735,000 after buying an additional 96 shares in the last quarter. Institutional investors and hedge funds own 71.13% of the company's stock.

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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