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

Key Points

• Microsoft saw unusually heavy options activity: Investors purchased 943,367 call options, 16% above the average daily volume, while shares surged 16.7% to $455.66 on unusually high trading volume.
• Quarterly results exceeded expectations: Revenue rose 17.7% year over year to $90.01 billion and EPS reached $4.74, beating consensus estimates. Azure growth of 43% and expanding Copilot adoption reinforced the company’s cloud and AI momentum.
• Analyst sentiment remains bullish, with 42 Buy ratings and a consensus price target of $557.98, although elevated AI capital spending, regulatory scrutiny and cloud-security concerns remain risks. Microsoft also declared a quarterly dividend of $0.91 per share.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) saw unusually large options trading on Thursday. Stock investors acquired 943,367 call options on the stock. This represents an increase of 16% compared to the average daily volume of 815,592 call options.

Microsoft Stock Up 16.7%

Shares of MSFT stock traded up $65.12 during trading on Thursday, reaching $455.66. The company's stock had a trading volume of 79,764,894 shares, compared to its average volume of 37,393,605. Microsoft has a 1-year low of $349.20 and a 1-year high of $555.45. The stock's 50-day moving average price is $396.43 and its 200 day moving average price is $405.74. The company has a market capitalization of $3.38 trillion, a price-to-earnings ratio of 27.13, a P/E/G ratio of 1.20 and a beta of 1.13. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27.

Microsoft (NASDAQ:MSFT - Get Free Report) last released its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. During the same period in the prior year, the business earned $3.65 EPS. The firm's quarterly revenue was up 17.7% on a year-over-year basis. On average, research analysts anticipate that Microsoft will post 16.7 EPS for the current 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 paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. The ex-dividend date is Thursday, August 20th. Microsoft's dividend payout ratio (DPR) is presently 21.67%.

Analyst Upgrades and Downgrades

MSFT has been the subject of a number of recent analyst reports. CLSA reiterated an "outperform" rating on shares of Microsoft in a research report on Thursday. Sanford C. Bernstein set a $647.00 price objective on shares of Microsoft in a research report on Thursday. Cantor Fitzgerald lifted their target price on shares of Microsoft from $502.00 to $522.00 and gave the company an "overweight" rating in a report on Monday. Benchmark reissued a "buy" rating on shares of Microsoft in a research report on Friday, July 24th. Finally, UBS Group set a $525.00 price target on Microsoft in a research report on Thursday. Forty-two research 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 currently has an average rating of "Moderate Buy" and a consensus price target of $557.98.

Insiders Place Their Bets

In related news, CEO Judson Althoff sold 15,500 shares of the firm's stock in a transaction dated Monday, June 1st. The stock was sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares of the company's stock, valued at approximately $50,928,792.23. This trade represents a 12.30% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of the firm's stock in a transaction dated Thursday, May 14th. The stock was sold at an average price of $411.34, for a total value of $519,111.08. Following the sale, the executive vice president directly owned 46,003 shares of the company's stock, valued at $18,922,874.02. The trade was a 2.67% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 23,762 shares of company stock valued at $10,508,361 over the last quarter. 0.03% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of MSFT. Longfellow Investment Management Co. LLC increased its holdings in Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after buying an additional 20 shares during the last quarter. Bernzott Capital Advisors acquired a new position in shares of Microsoft during the 4th quarter worth about $34,000. Timmons Wealth Management LLC acquired a new position in shares of Microsoft during the 4th quarter worth about $36,000. Fairway Wealth LLC increased its holdings in shares of Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant's stock valued at $43,000 after acquiring an additional 66 shares during the last quarter. Finally, Frankly Finances LLC acquired a new stake in shares of Microsoft during the 2nd quarter worth about $35,000. 71.13% of the stock is owned by institutional investors and hedge funds.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth exceeded expectations. Azure revenue increased 43% year over year, above the roughly 40% analyst forecast, and annual Azure revenue surpassed $100 billion for the first time. Intelligent Cloud revenue rose 32% to $39.3 billion, strengthening confidence in Microsoft’s cloud and AI strategy. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: Microsoft delivered a broad earnings beat. Fiscal Q4 revenue reached $90.01 billion versus an $87.62 billion consensus estimate, while adjusted earnings per share came in at $4.74 versus $4.24 expected. Revenue grew 17.7% year over year and net income rose about 31%. Microsoft Q4 earnings beat estimates
• Positive Sentiment: AI monetization is gaining traction. Microsoft 365 Copilot surpassed 30 million paid users, up from 20 million in April. Management also cited strong AI demand, a large customer backlog and a first-quarter fiscal 2027 revenue outlook of $89.9 billion to $91.0 billion, slightly above consensus. Analysts responded with multiple buy-rating reiterations and higher price targets. Microsoft shares set for best day in nearly 18 years
• Neutral Sentiment: Capital spending remains elevated but appears more manageable. Microsoft’s projected 2026 capital expenditures declined to approximately $175 billion from $190 billion, largely because of an accounting adjustment rather than a major reduction in AI investment. The company said GPU spending can be slowed if demand weakens, while extending data-center lifespans may improve returns. Microsoft’s capex forecast
• Negative Sentiment: Regulatory and legal overhangs persist. The U.K. competition regulator is investigating whether Microsoft misled customers about Microsoft 365 subscription options, while several law firms publicized securities-fraud lawsuits related to alleged Copilot disclosures. UK investigation into Microsoft 365 subscriptions
• Negative Sentiment: Cloud-security and competitive risks remain. Cybersecurity firm Wiz reported a flaw that could potentially have exposed Microsoft cloud customers, and Nvidia’s proposed financing backstop for OpenAI highlights uncertainty around AI infrastructure financing and Microsoft’s relationship with competing AI platforms. Wiz report on 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).

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.