Wedbush Reaffirms Outperform Rating for Microsoft (NASDAQ:MSFT)

Key Points

• Wedbush reaffirmed its Outperform rating on Microsoft and kept a $575 price target, implying about 42.8% upside from the current share price.
• Microsoft’s latest quarter beat expectations, with EPS of $4.27 versus $4.06 expected and revenue of $82.89 billion, up 18.3% year over year.
• Sentiment remains broadly positive, with analysts showing a Moderate Buy consensus and a $560.88 average price target, while news flow continues to focus on Microsoft’s role as an AI winner and its relationship with OpenAI.

Microsoft (NASDAQ:MSFT - Get Free Report)'s stock had its "outperform" rating reissued by equities research analysts at Wedbush in a research report issued to clients and investors on Wednesday,Benzinga reports. They presently have a $575.00 target price on the software giant's stock. Wedbush's price target points to a potential upside of 42.82% from the company's current price.

Several other analysts also recently issued reports on the company. Melius Research set a $430.00 price target on Microsoft in a report on Monday, February 9th. Wolfe Research decreased their target price on Microsoft from $625.00 to $530.00 and set an "outperform" rating for the company in a research report on Thursday, January 29th. Citigroup increased their target price on Microsoft from $600.00 to $620.00 and gave the company a "buy" rating in a research note on Thursday, April 30th. Dbs Bank dropped their target price on Microsoft from $678.00 to $573.00 in a report on Thursday, May 7th. Finally, Oppenheimer reissued an "outperform" rating and set a $515.00 price target (down from $630.00) on shares of Microsoft in a research report on Monday, April 27th. Thirty-nine analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $560.88.

Microsoft Price Performance

Microsoft stock traded down $5.16 during midday trading on Wednesday, reaching $402.61. 5,735,520 shares of the company were exchanged, compared to its average volume of 35,257,766. The firm's 50-day simple moving average is $397.60 and its 200-day simple moving average is $443.14. Microsoft has a 1 year low of $356.28 and a 1 year high of $555.45. The company has a market capitalization of $2.99 trillion, a price-to-earnings ratio of 23.95, a P/E/G ratio of 1.49 and a beta of 1.10. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28.

Microsoft (NASDAQ:MSFT - Get Free Report) last released its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $4.06 by $0.21. The company had revenue of $82.89 billion for the quarter, compared to analyst estimates of $81.44 billion. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The firm's quarterly revenue was up 18.3% on a year-over-year basis. During the same period in the prior year, the firm earned $3.46 EPS. On average, analysts anticipate that Microsoft will post 16.76 EPS for the current year.

Insider Buying and Selling

In related 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 purchased at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the acquisition, 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 transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Kathleen T. Hogan sold 12,321 shares of the stock in a transaction 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 transaction, the executive vice president owned 137,933 shares in the company, valued at $56,486,322.16. This trade represents a 8.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.03% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Microsoft

A number of institutional investors have recently modified their holdings of the stock. BLVD Private Wealth LLC raised its position in shares of Microsoft by 0.6% during the third quarter. BLVD Private Wealth LLC now owns 3,169 shares of the software giant's stock worth $1,641,000 after purchasing an additional 19 shares during the period. Longfellow Investment Management Co. LLC lifted its position in shares of Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant's stock worth $29,000 after buying an additional 20 shares in the last quarter. Magnolia Capital Management Ltd. boosted its position in Microsoft by 0.3% in the third quarter. Magnolia Capital Management Ltd. now owns 6,509 shares of the software giant's stock worth $3,371,000 after purchasing an additional 20 shares during the last quarter. ARK & TLK Investments LLC raised its stake in shares of Microsoft by 1.0% during the 3rd quarter. ARK & TLK Investments LLC now owns 1,935 shares of the software giant's stock worth $1,002,000 after purchasing an additional 20 shares during the period. Finally, Rochester Wealth Strategies LLC raised its position in Microsoft by 2.9% in the third quarter. Rochester Wealth Strategies LLC now owns 700 shares of the software giant's stock worth $363,000 after acquiring an additional 20 shares during the period. Institutional investors and hedge funds own 71.13% of the company's stock.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft is still being viewed as a long-term AI winner, with several bullish articles pointing to durable cloud demand, strong fundamentals, and continued upside potential if AI monetization keeps improving.
• Positive Sentiment: OpenAI-related developments may be constructive for Microsoft: reports say OpenAI agreed to cap revenue-sharing payments to Microsoft at $38 billion through 2030, a move that could clarify economics and support OpenAI’s IPO path while preserving the partnership. OpenAI to cap Microsoft revenue-sharing at $38 billion, The Information reports
• Positive Sentiment: Satya Nadella’s testimony in the Musk v. OpenAI case reinforced Microsoft’s central role in AI and its early backing of OpenAI, which some investors may see as validating Microsoft’s strategic position in the AI ecosystem.
• Neutral Sentiment: Multiple market commentary pieces discussed Microsoft as a core mega-cap name and highlighted options activity, valuation arguments, and broader AI trade positioning, but these were mostly opinion-driven and not company-specific catalysts.
• Negative Sentiment: Some investors are questioning whether Microsoft’s massive AI spending is pressuring cash flow too much, with articles warning that the AI boom is real but that capex and cash generation trade-offs could weigh on the stock.
• Negative Sentiment: Coverage of the OpenAI lawsuit also revived concerns that Microsoft has too much exposure to OpenAI’s governance and legal disputes, while several hedge funds reportedly trimmed MSFT stakes, adding to cautious sentiment. Microsoft AI Reliance Questioned As TCI Exits And OpenAI Terms Emerge
• Negative Sentiment: One report said Microsoft’s Kenyan data center project has been delayed due to payment demands, which could be seen as a reminder that infrastructure expansion is not always smooth. Microsoft's Kenyan data center delayed on payment demands: report

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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