Microsoft (NASDAQ:MSFT) Trading Up 1.1% – Time to Buy?

Shares of Microsoft Corporation (NASDAQ:MSFT) shot up 1.1% on Tuesday . The company traded as high as $400.32 and last traded at $393.35. 32,180,517 shares changed hands during trading, a decline of 13% from the average session volume of 36,994,984 shares. The stock had previously closed at $389.10.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: New AI cybersecurity products: Microsoft unveiled its first internally developed cybersecurity model, MAI-Cyber-1-Flash, along with Project Perception, an agentic platform designed to identify and respond to AI-driven attacks. The products could strengthen Microsoft’s position in the expanding enterprise security market and support demand for its broader AI ecosystem. Microsoft launches AI cybersecurity model article
• Positive Sentiment: Analysts remain bullish: Citizens reaffirmed a Market Outperform rating with a $550 price target, while Piper Sandler maintained an Overweight rating and a $540 target. Guggenheim also reiterated its Buy rating with a $586 target, signaling substantial perceived upside after Microsoft’s recent pullback. Microsoft analyst rating article
• Positive Sentiment: Azure demand is central to the earnings setup: Analysts expect continued cloud and AI demand, with investors looking for evidence that Azure growth and cash generation can justify Microsoft’s planned roughly $190 billion in capital spending. Options markets imply a large post-earnings move, increasing the potential for a positive reaction if results and guidance exceed expectations. Microsoft capital spending and Azure article
• Neutral Sentiment: Market-wide volatility: Stocks are rebounding ahead of the Federal Reserve’s interest-rate decision and a heavy slate of Big Tech earnings. Lower rates could support technology valuations, but the upcoming events may produce sharp swings in MSFT.
• Negative Sentiment: AI spending and return-on-investment concerns: Investors are increasingly focused on whether Microsoft’s escalating capital expenditures will generate sufficient Azure revenue and margins. Alphabet’s higher spending outlook has heightened scrutiny of Microsoft, Meta and Amazon, while short sellers are positioning ahead of earnings. Hyperscaler capital expenditure scrutiny article
• Negative Sentiment: Litigation over Copilot and Azure disclosures: Several law firms publicized securities class actions alleging Microsoft misled investors about Copilot’s capabilities and Azure-related growth. The lawsuits are an overhang, though their immediate financial impact remains uncertain. Microsoft securities class action article

Wall Street Analysts Forecast Growth

Several equities analysts recently issued reports on the company. TD Cowen reiterated a “buy” rating and issued a $540.00 price target on shares of Microsoft in a report on Thursday, June 4th. UBS Group cut their target price on shares of Microsoft from $510.00 to $480.00 and set a “buy” rating on the stock in a research report on Monday. Wedbush reaffirmed an “outperform” rating and issued a $575.00 target price on shares of Microsoft in a research note on Wednesday, May 13th. The Goldman Sachs Group reiterated a “buy” rating on shares of Microsoft in a research report on Thursday, April 30th. Finally, BMO Capital Markets boosted their price target on shares of Microsoft from $500.00 to $515.00 and gave the stock an “outperform” rating in a research note on Tuesday, July 7th. Forty-two research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company’s stock. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average price target of $554.73.

Microsoft Stock Up 1.1%

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 $2.92 trillion, a price-to-earnings ratio of 23.41, a price-to-earnings-growth ratio of 1.17 and a beta of 1.13. The firm has a 50 day simple moving average of $397.52 and a two-hundred day simple moving average of $406.99.

Microsoft (NASDAQ:MSFT) last announced its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, beating analysts’ consensus estimates of $4.06 by $0.21. The company had revenue of $82.89 billion during the quarter, compared to analysts’ expectations of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.Microsoft’s revenue was up 18.3% on a year-over-year basis. During the same period in the prior year, the business posted $3.46 EPS. As a group, sell-side analysts expect that Microsoft Corporation will post 16.7 EPS for the current year.

Microsoft Announces Dividend

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

Insider Buying and Selling at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 4,500 shares of the stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total value of $1,812,780.00. Following the sale, the executive vice president directly owned 47,468 shares in the company, valued at approximately $19,122,009.12. This trade represents a 8.66% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction on 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 transaction, the chief executive officer directly owned 110,477 shares in the company, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 23,762 shares of company stock valued at $10,508,361. Corporate insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Longfellow Investment Management Co. LLC boosted its holdings in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares during the period. Bernzott Capital Advisors acquired a new position in Microsoft in the 4th quarter worth $34,000. Frankly Finances LLC bought a new position in Microsoft during the 2nd quarter worth about $35,000. Timmons Wealth Management LLC acquired a new stake in shares of Microsoft in the 4th quarter valued at about $36,000. Finally, Fairway Wealth LLC lifted its holdings in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after purchasing an additional 66 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors.

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).