Stock Traders Buy Large Volume of Call Options on Microsoft (NASDAQ:MSFT)

Key Points

• Traders bought an unusually large volume of options — 943,699 call options were purchased (up 31% vs. average), suggesting speculative bullish interest that could amplify intraday moves.
• Microsoft posted a strong quarter (EPS $4.27 vs. $4.04; revenue $82.89B) and highlighted AI/cloud momentum, but shares fell 3.9% to $407.78 on heavy volume as investors reacted to higher near‑term spending, including raised 2026 capex guidance near $190B.
• The company declared a quarterly dividend of $0.91 per share (0.9% yield) while analysts remain mostly positive (MarketBeat shows a "Moderate Buy" consensus with an average target of $556.95) and insiders recorded modest buys and sells.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) saw unusually large options trading activity on Thursday. Stock investors purchased 943,699 call options on the stock. This represents an increase of 31% compared to the average volume of 719,159 call options.

Microsoft Stock Down 3.9%

Shares of MSFT traded down $16.68 during midday trading on Thursday, hitting $407.78. 70,680,930 shares of the company's stock traded hands, compared to its average volume of 30,809,622. Microsoft has a 1 year low of $356.28 and a 1 year high of $555.45. The firm's fifty day moving average is $395.09 and its 200-day moving average is $448.65. The company has a current ratio of 1.39, a quick ratio of 1.38 and a debt-to-equity ratio of 0.09. The stock has a market capitalization of $3.03 trillion, a price-to-earnings ratio of 26.22, a price-to-earnings-growth ratio of 1.60 and a beta of 1.11.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, beating the consensus estimate of $4.04 by $0.23. Microsoft had a return on equity of 33.00% and a net margin of 39.34%.The firm had revenue of $82.89 billion during the quarter, compared to analyst estimates of $81.30 billion. During the same quarter in the prior year, the business posted $3.46 EPS. The business's revenue for the quarter was up 18.3% compared to the same quarter last year. As a group, sell-side analysts anticipate that Microsoft will post 16.54 earnings per share for the current year.

Microsoft Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be issued a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a dividend yield of 0.9%. The ex-dividend date is Thursday, May 21st. Microsoft's dividend payout ratio is currently 22.76%.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q3 beat and AI/cloud momentum — MSFT beat EPS and revenue expectations, Azure/cloud growth accelerated ~40% and management cited an AI revenue run‑rate near $37B, supporting the long‑term growth story. Microsoft Q3 press release and transcript
• Positive Sentiment: Analysts largely remain bullish — multiple firms reaffirmed Buy/Outperform ratings and some raised targets (Wells Fargo, Piper Sandler and others), reflecting confidence in Azure and AI monetization. Microsoft Wins Buy Rating on Strong AI-Driven Cloud Momentum
• Positive Sentiment: Product traction: Copilot & LinkedIn monetization — management said paid Copilot users and LinkedIn AI hiring products are scaling, which supports higher recurring AI revenue potential. Microsoft says it has over 20m paid Copilot users
• Neutral Sentiment: Wall Street is split — some firms trimmed targets on valuation/spending concerns while others lifted targets on stronger AI monetization; expect continued divergent analyst commentary and price‑target revisions. Wall Street Splits on Microsoft After Earnings
• Neutral Sentiment: Options activity shows speculative bullish interest — unusually large call volume suggests some traders are betting on a rebound even as the stock trades lower (this can amplify intraday moves).
• Negative Sentiment: Heavy capex & margin/cash‑flow concerns — MSFT raised 2026 capex guidance toward ~\$190B and noted a meaningful jump in infrastructure spending; investors sold into the beat, fearing pressure on free cash flow and near‑term returns. Microsoft Falls 5% Despite Q3 Beat: Why $190 Billion in AI Spending Has Investors Worried
• Negative Sentiment: Near‑term target trims and one‑time charges — several firms trimmed targets and Microsoft disclosed charges (e.g., voluntary retirement program) and other near‑term costs, adding to headline risk. Cantor Fitzgerald Cuts Microsoft Price Target

Analyst Ratings Changes

MSFT has been the subject of a number of analyst reports. Jefferies Financial Group restated a "buy" rating on shares of Microsoft in a report on Friday, April 24th. Wolfe Research lowered their target price on Microsoft from $625.00 to $530.00 and set an "outperform" rating for the company in a report on Thursday, January 29th. William Blair restated an "outperform" rating on shares of Microsoft in a report on Monday, March 9th. Wells Fargo & Company upped their target price on Microsoft from $615.00 to $625.00 and gave the stock an "overweight" rating in a report on Thursday. Finally, Robert W. Baird lowered their target price on Microsoft from $540.00 to $500.00 and set an "outperform" rating for the company in a report on Wednesday, April 15th. One investment analyst has rated the stock with a Strong Buy rating, forty have given a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $556.95.

Insider Activity

In other Microsoft news, Director John W. Stanton bought 5,000 shares of the company's stock in a transaction 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 acquisition, the director directly owned 83,905 shares in the company, valued at approximately $33,339,651.75. The trade was a 6.34% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business's stock in a transaction dated 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 of the company's stock, valued at approximately $56,486,322.16. This represents a 8.20% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.03% of the stock is owned by corporate insiders.

Institutional Trading of Microsoft

Hedge funds and other institutional investors have recently made changes to their positions in the business. Longfellow Investment Management Co. LLC increased its position in shares of Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock valued at $29,000 after acquiring an additional 20 shares during the period. Bernzott Capital Advisors acquired a new position in shares of Microsoft in the 4th quarter valued at $34,000. Timmons Wealth Management LLC acquired a new position in shares of Microsoft in the 4th quarter valued at $36,000. Bayforest Capital Ltd acquired a new position in shares of Microsoft in the 3rd quarter valued at $38,000. Finally, Fairway Wealth LLC increased its position 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 period. Hedge funds and other 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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