Microsoft's (MSFT) "Outperform" Rating Reaffirmed at Wedbush

Key Points

• Wedbush reaffirmed an "Outperform" on Microsoft with a $575 price objective, implying roughly a 42% upside, while the consensus MarketBeat target is about $555.20 and the analyst rating mix is largely Buy/Moderate Buy.
• Microsoft beat Q3 expectations, reporting $4.27 EPS vs. $4.04 est. and $82.89B revenue (up 18.3% YoY), with Azure growth near 40% and AI momentum—including a roughly $37B AI revenue run‑rate and >20M paid Copilot users—supporting monetization upside.
• Despite the beat, shares slipped ~4.9% as investors reacted to materially higher 2026 capex (near ~$190B) and a ~$900M voluntary retirement charge plus potential headcount reductions, raising margin and cash‑flow concerns.

Microsoft (NASDAQ:MSFT - Get Free Report)'s stock had its "outperform" rating reissued by equities researchers at Wedbush in a research report issued to clients and investors on Thursday,Benzinga reports. They currently have a $575.00 price objective on the software giant's stock. Wedbush's price target indicates a potential upside of 42.39% from the stock's previous close.

A number of other equities analysts also recently weighed in on MSFT. Royal Bank Of Canada reissued a "buy" rating on shares of Microsoft in a report on Monday. President Capital boosted their price objective on Microsoft from $500.00 to $520.00 and gave the company a "buy" rating in a research note on Thursday. Evercore lowered their price objective on Microsoft from $580.00 to $510.00 and set an "outperform" rating on the stock in a research note on Thursday. The Goldman Sachs Group restated a "buy" rating on shares of Microsoft in a research note on Thursday. Finally, Melius Research set a $430.00 price objective on Microsoft in a research note on Monday, February 9th. One analyst has rated the stock with a Strong Buy rating, forty have given a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average target price of $555.20.

Microsoft Stock Down 4.9%

MSFT traded down $20.65 during mid-day trading on Thursday, reaching $403.81. 19,498,630 shares of the stock were exchanged, compared to its average volume of 35,195,066. The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.38 and a current ratio of 1.39. The stock has a market capitalization of $3.00 trillion, a PE ratio of 25.25, a price-to-earnings-growth ratio of 1.60 and a beta of 1.11. The company has a 50 day moving average price of $395.09 and a two-hundred day moving average price of $448.65. Microsoft has a 1 year low of $356.28 and a 1 year high of $555.45.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping analysts' consensus estimates of $4.04 by $0.23. The company had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.30 billion. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The firm's quarterly revenue was up 18.3% on a year-over-year basis. During the same period in the previous year, the firm earned $3.46 EPS. As a group, research analysts anticipate that Microsoft will post 16.54 EPS for the current year.

Insider Activity at Microsoft

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

Institutional Trading of Microsoft

Several hedge funds and other institutional investors have recently bought and sold shares of the company. Norges Bank bought a new position in shares of Microsoft during the fourth quarter valued at approximately $50,664,631,000. Auto Owners Insurance Co raised its holdings 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 valued at $29,073,486,000 after acquiring an additional 60,009,531 shares in the last quarter. Nuveen LLC bought a new position in shares of Microsoft during the first quarter valued at approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in Microsoft by 500.0% in 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 worth $30,840,432,000 after purchasing an additional 49,618,571 shares in the last quarter. Finally, Laurel Wealth Advisors LLC raised its holdings 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 worth $14,905,904,000 after purchasing an additional 29,906,791 shares in the last quarter. Hedge funds and other institutional investors own 71.13% of the company's stock.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q3 beat and AI traction — MSFT topped EPS and revenue expectations; Azure grew ~40% and Microsoft said AI-related revenue is on a roughly $37B annual run‑rate, providing evidence the AI investment is translating to demand. Microsoft Q3 Highlights
• Positive Sentiment: Copilot adoption and paid users — Microsoft disclosed strong Copilot traction (over 20M paid users and high engagement), supporting recurring AI monetization upside. TechCrunch on Copilot
• Positive Sentiment: Wall Street remains largely bullish — multiple firms reiterated/raised buy ratings and price targets (Piper Sandler, Wells Fargo, HSBC, others), signaling analyst confidence in Azure/AI secular growth despite near‑term noise. Analyst moves (Benzinga roundup)
• Neutral Sentiment: Strategic shift to “agentic computing” — CEO commentary and a companywide AI roadmap suggest long‑term upside if Microsoft can lead the next OS/agent stack, but execution and timing remain uncertain. Agentic AI article
• Negative Sentiment: Surging capex — MSFT raised its 2026 capex outlook sharply (nearly $190B), highlighting massive investment in AI data centers; investors worry about margin/cash‑flow pressure from continued heavy infrastructure spending. CapEx outlook
• Negative Sentiment: One‑time charges and restructuring — Microsoft flagged a ~$900M voluntary retirement charge and signaled upcoming headcount reductions; these costs and reorg noise weighed on sentiment. Voluntary retirement charge
• Negative Sentiment: Post‑earnings pullback & investor caution — Despite the beat, shares slipped in after‑hours/early trading as markets focused on higher spending and margin tradeoffs; some funds trimmed positions. Barron's on market reaction
• Neutral Sentiment: OpenAI deal reset and partner dynamics — Revised OpenAI terms and Amazon/App. Bedrock moves reduce Microsoft’s exclusivity but Microsoft retains long‑dated commercial ties; implications are mixed for cloud competitive dynamics. Satya on OpenAI reset
• Negative Sentiment: Notable investor actions — Some institutional trimming (e.g., Guardcap sold shares) adds to selling pressure and signals caution among certain large holders. Guardcap stake cut

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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