Blue Grotto Capital LLC Invests $40.75 Million in Microsoft Corporation $MSFT

Blue Grotto Capital LLC acquired a new position in shares of Microsoft Corporation (NASDAQ:MSFT) in the fourth quarter, Holdings Channel.com reports. The fund acquired 84,252 shares of the software giant’s stock, valued at approximately $40,746,000. Microsoft comprises about 4.2% of Blue Grotto Capital LLC’s portfolio, making the stock its 14th biggest holding.

A number of other hedge funds also recently made changes to their positions in the stock. Longfellow Investment Management Co. LLC raised its position in Microsoft by 51.3% in 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 during the period. Bernzott Capital Advisors purchased a new position in Microsoft in the 4th quarter worth $34,000. Timmons Wealth Management LLC purchased a new position in Microsoft in the 4th quarter worth $36,000. Fairway Wealth LLC raised its position in 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 purchasing an additional 66 shares during the period. Finally, LSV Asset Management purchased a new position in Microsoft in the 4th quarter worth $44,000. 71.13% of the stock is owned by institutional investors.

Insider Buying and Selling at Microsoft

In other Microsoft news, EVP Amy Coleman sold 1,262 shares of the business’s stock in a transaction dated Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the transaction, the executive vice president 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 transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of the business’s stock in a transaction dated Monday, June 1st. The shares were 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 owned 110,477 shares in the company, valued at $50,928,792.23. The trade was a 12.30% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is currently owned by company insiders.

Microsoft Price Performance

MSFT stock opened at $393.83 on Wednesday. The firm’s 50-day moving average price is $412.01 and its two-hundred day moving average price is $427.45. Microsoft Corporation has a 12-month low of $356.28 and a 12-month high of $555.45. The stock has a market capitalization of $2.93 trillion, a price-to-earnings ratio of 23.44, a PEG ratio of 1.44 and a beta of 1.11. The company has a current ratio of 1.28, a quick ratio of 1.27 and a debt-to-equity ratio of 0.08.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data 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. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The firm had revenue of $82.89 billion for the quarter, compared to analysts’ expectations of $81.44 billion. During the same quarter in the previous year, the company earned $3.46 earnings per share. The company’s revenue for the quarter was up 18.3% compared to the same quarter last year. As a group, equities analysts predict that Microsoft Corporation will post 16.76 earnings per share for the current year.

Microsoft Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a $0.91 dividend. The ex-dividend date is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. Microsoft’s payout ratio is presently 21.67%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft launched a new AI agent with pay-as-you-go pricing, a shift that could improve monetization and help the company capture more revenue as customers adopt usage-based AI tools.
• Positive Sentiment: Reports say Microsoft is exploring lower-cost AI model options for Copilot, which could reduce infrastructure costs and improve profitability if implemented successfully.
• Positive Sentiment: Microsoft’s product and AI roadmap continues to attract long-term bulls, with analysts and investors still pointing to the company’s strong enterprise position and AI-driven growth potential.
• Neutral Sentiment: Microsoft was reported to have held talks for a $3 billion Oracle cloud infrastructure lease, but the deal reportedly collapsed over security and compliance issues, limiting any near-term impact on operations.
• Neutral Sentiment: Coverage around a possible Xbox restructuring or spin-off highlights strategic uncertainty in gaming, though it could eventually improve Microsoft’s overall margin profile if the division is separated or reshaped.
• Negative Sentiment: Shareholders filed a class action and securities-fraud investigations were announced over alleged misstatements tied to Azure growth and AI spending, creating legal and reputational overhang for Microsoft Corporation (NASDAQ: MSFT).
• Negative Sentiment: Reports that Microsoft may shut down or restructure Xbox studios add to concerns that the gaming segment is a drag on profitability and could require more restructuring costs.
• Negative Sentiment: Recent commentary also points to heavy AI capital expenditures and softer Azure growth, reinforcing investor worries that Microsoft’s spending is rising faster than its cloud revenue growth.

Analyst Upgrades and Downgrades

MSFT has been the topic of a number of analyst reports. Guggenheim reiterated a “buy” rating and issued a $586.00 target price on shares of Microsoft in a research report on Thursday, April 30th. Oppenheimer reiterated an “outperform” rating and issued a $515.00 target price (down from $630.00) on shares of Microsoft in a research report on Monday, April 27th. Dbs Bank decreased their target price on shares of Microsoft from $678.00 to $573.00 in a research report on Thursday, May 7th. DA Davidson decreased their target price on shares of Microsoft from $650.00 to $550.00 and set a “buy” rating on the stock in a research report on Thursday, April 30th. Finally, Phillip Securities upgraded shares of Microsoft to a “buy” rating and set a $485.00 target price on the stock in a research report on Wednesday, May 13th. Forty-one research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $561.20.

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).