Investors Buy High Volume of Microsoft Call Options (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was the recipient of unusually large options trading activity on Monday. Stock traders purchased 811,669 call options on the stock. This represents an increase of 31% compared to the average daily volume of 620,074 call options.

Analyst Ratings Changes

A number of equities research analysts have weighed in on the stock. Guggenheim reiterated a “buy” rating and set a $586.00 price target on shares of Microsoft in a research report on Thursday, January 22nd. Morgan Stanley reiterated an “overweight” rating on shares of Microsoft in a research report on Thursday, January 29th. Weiss Ratings cut shares of Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Tuesday, March 24th. BNP Paribas Exane dropped their price target on shares of Microsoft from $659.00 to $556.00 and set an “outperform” rating for the company in a research report on Friday. Finally, UBS Group dropped their price target on shares of Microsoft from $600.00 to $510.00 and set a “buy” rating for the company in a research report on Wednesday, March 25th. Two research analysts have rated the stock with a Strong Buy rating, thirty-eight have given a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $586.26.

Microsoft Stock Up 3.6%

MSFT stock traded up $13.50 during midday trading on Monday, reaching $384.37. 35,501,274 shares of the company were exchanged, compared to its average volume of 30,346,804. The stock’s 50-day simple moving average is $391.33 and its 200 day simple moving average is $456.51. The company has a market cap of $2.85 trillion, a price-to-earnings ratio of 24.04, a price-to-earnings-growth ratio of 1.41 and a beta of 1.11. Microsoft has a 1-year low of $355.67 and a 1-year high of $555.45. The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.38 and a current ratio of 1.39.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating analysts’ consensus estimates of $3.86 by $0.28. The business had revenue of $81.27 billion for the quarter, compared to analysts’ expectations of $80.28 billion. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The company’s quarterly revenue was up 16.7% on a year-over-year basis. During the same period in the previous year, the company posted $3.23 EPS. On average, equities analysts forecast that Microsoft will post 13.08 earnings per share for the current year.

Microsoft Dividend Announcement

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

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Unusually heavy bullish options flow: traders bought roughly 811,669 MSFT call options Monday (about +31% vs. average), signaling short‑term investor conviction and speculative buying that can lift the stock.
• Positive Sentiment: Investor/market commentary is bullish — some investors now say it’s time to pounce after the pullback, framing MSFT as a value play with long-term AI and Azure upside. Microsoft Stock (MSFT) Rebound Gains Steam
• Positive Sentiment: Analyst backing and buy‑the‑dip narratives: Bernstein and other bull cases argue AI capex fears are over‑priced and the pullback creates a margin of safety; several firms maintain bullish ratings and lofty price targets (median target still well above current levels). ‘This Looks Worse Than It Is,’ Says Bernstein
• Positive Sentiment: Positive fundamentals on AI monetization: coverage highlights Copilot, Azure growth and a sizable AI backlog as drivers of revenue and margins — supporting the bull narrative that near‑term noise may not derail long‑term cash flow. This Is How Microsoft Is Making Money from AI Right Now
• Neutral Sentiment: Upcoming catalyst: Microsoft reports earnings later this month (April 29) — results and Azure growth commentary could amplify moves in either direction, so many traders are positioning ahead of the print. Should You Buy Microsoft Stock Before April 29?
• Neutral Sentiment: Sector tailwind: tech stocks were broadly firmer late Monday, which often lifts large-cap names like MSFT alongside the group. Sector Update: Tech Stocks Gain Late Afternoon
• Negative Sentiment: OpenAI partnership friction: a leaked internal memo and reporting that OpenAI sees Microsoft as limiting its enterprise reach — plus OpenAI’s pivot toward Amazon/AWS — raise strategic risk to MSFT’s exclusive‑access narrative and could pressure future AI revenue assumptions. OpenAI touts Amazon alliance in memo, says Microsoft has ‘limited our ability’
• Negative Sentiment: Competition and product overlap: Anthropic and others are expanding into Office/enterprise integrations (e.g., Claude for Word), which could cap some of Microsoft’s Copilot upside and add competitive pressure. Anthropic Launches Claude for Word
• Negative Sentiment: AI capex and margin concerns: social and analyst discussion flag heavy AI infrastructure spending and a technical downtrend; if capex keeps compressing margins or Azure growth disappoints, downside could deepen before recovery. Microsoft Stock Opinions on AI Capex-Driven Drawdown

Insider Activity

In other news, Director John W. Stanton acquired 5,000 shares of the business’s stock in a transaction that occurred on Wednesday, February 18th. The stock was purchased 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 transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the firm’s stock in a transaction dated 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 sale, the executive vice president owned 137,933 shares of the company’s stock, valued at approximately $56,486,322.16. The trade was 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 company insiders.

Hedge Funds Weigh In On Microsoft

Several institutional investors have recently bought and sold shares of MSFT. Longfellow Investment Management Co. LLC boosted 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 purchasing an additional 20 shares in the last quarter. Bernzott Capital Advisors purchased a new stake in shares of Microsoft in the 4th quarter worth about $34,000. Timmons Wealth Management LLC purchased a new stake in shares of Microsoft in the 4th quarter worth about $36,000. Bayforest Capital Ltd purchased a new stake in shares of Microsoft in the 3rd quarter worth about $38,000. Finally, Fairway Wealth LLC boosted 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 worth $43,000 after buying an additional 66 shares in the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

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).