TD Cowen Reiterates Buy Rating for Microsoft (NASDAQ:MSFT)

Key Points

• TD Cowen reiterated a Buy rating on Microsoft and kept a $540 price target, implying about 25% upside from the current price.
• Microsoft’s latest quarterly earnings beat expectations, with EPS of $4.27 versus $4.06 expected and revenue of $82.89 billion, up 18.3% year over year.
• The stock has broad analyst support, with 41 Buy ratings and a consensus target price of $561.20, though there were also recent insider sales and some concerns about heavy AI spending.

Microsoft (NASDAQ:MSFT - Get Free Report)'s stock had its "buy" rating reiterated by equities researchers at TD Cowen in a note issued to investors on Thursday,Benzinga reports. They presently have a $540.00 price target on the software giant's stock. TD Cowen's price target indicates a potential upside of 25.24% from the stock's current price.

Several other equities analysts also recently weighed in on MSFT. UBS Group restated a "buy" rating on shares of Microsoft in a research report on Friday, April 24th. Deutsche Bank Aktiengesellschaft decreased their target price on shares of Microsoft from $575.00 to $550.00 and set a "buy" rating on the stock in a research note on Thursday, April 30th. DZ Bank reiterated a "buy" rating on shares of Microsoft in a research report on Thursday, April 30th. 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 note on Wednesday, April 15th. Finally, BMO Capital Markets reduced their price target on Microsoft from $575.00 to $505.00 and set an "outperform" rating on the stock in a report on Tuesday, April 28th. Forty-one investment analysts have rated the stock with a Buy rating and six have given a Hold rating to the company's stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $561.20.

Microsoft Stock Up 0.9%

Shares of MSFT stock traded up $3.82 during mid-day trading on Thursday, hitting $431.16. 7,086,369 shares of the stock traded hands, compared to its average volume of 35,656,773. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The stock has a market cap of $3.20 trillion, a P/E ratio of 25.62, a P/E/G ratio of 1.59 and a beta of 1.11. The stock's fifty day moving average is $405.61 and its two-hundred day moving average is $432.76. Microsoft has a 52-week low of $356.28 and a 52-week 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 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 during the quarter, compared to analysts' expectations of $81.44 billion. During the same quarter in the previous year, the firm posted $3.46 EPS. The firm's revenue was up 18.3% compared to the same quarter last year. Equities analysts predict that Microsoft will post 16.76 EPS for the current year.

Insider Buying and Selling at Microsoft

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 transaction, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. 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 sale, the executive vice president directly owned 46,003 shares in the company, 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. Insiders have sold a total of 29,083 shares of company stock valued at $12,710,152 over the last quarter. 0.03% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of the stock. Norges Bank purchased a new position in shares of Microsoft in the 4th quarter valued at about $50,664,631,000. Auto Owners Insurance Co grew its holdings in shares of Microsoft by 56,160.8% in the 4th 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 period. Nuveen LLC purchased a new position in Microsoft in the 1st quarter valued at approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its stake in Microsoft by 500.0% in the 3rd 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 purchasing an additional 49,618,571 shares in the last quarter. Finally, Laurel Wealth Advisors LLC boosted its position in Microsoft by 49,640.3% during 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. 71.13% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft used Build 2026 to unveil new in-house AI models, including MAI-Code-1 and MAI-Thinking-1, which could lower costs and reduce reliance on OpenAI and Anthropic. Article: Microsoft debuts in-house AI models, as it looks to ease reliance on OpenAI
• Positive Sentiment: The company also launched Microsoft Scout and other agentic AI tools, reinforcing its push to monetize AI across Microsoft 365 and developer workflows. Article: Microsoft launches Scout, an OpenClaw-inspired personal assistant
• Positive Sentiment: Microsoft deepened its partnership with Nvidia on AI PCs and Azure infrastructure, a bullish signal for the Windows ecosystem and future AI demand. Article: Nvidia and Microsoft Roll Out Unified Stack for Agentic AI Across Windows and Azure
• Positive Sentiment: Microsoft’s Majorana 2 quantum chip announcement added a long-term innovation catalyst, even if the commercial payoff is years away. Article: Microsoft reveals new quantum chip made with AI, says it will have systems by 2029
• Neutral Sentiment: Analyst commentary remains generally constructive, with multiple reports highlighting Azure upside and MSFT’s attractive long-term valuation case.
• Negative Sentiment: Microsoft Chief People Officer Judson Althoff sold 15,500 shares, which can add near-term sentiment pressure even though the sale was relatively modest versus his remaining stake. Article: Microsoft CEO Sells $7,145,345.00 in Stock
• Negative Sentiment: Some investors are worried Microsoft is spending heavily on AI infrastructure and development before those investments translate into clearer returns, which has contributed to the stock’s pullback.

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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