Microsoft (NASDAQ:MSFT) Shares Up 15.5% After Earnings Beat

Microsoft Corporation (NASDAQ:MSFT)’s share price was up 15.5% on Thursday following a stronger than expected earnings report. The stock traded as high as $458.69 and last traded at $451.10. Approximately 109,445,388 shares changed hands during mid-day trading, an increase of 191% from the average session volume of 37,615,195 shares. The stock had previously closed at $390.54.

The software giant reported $4.74 EPS for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The business had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. During the same period last year, the company posted $3.65 EPS. The business’s revenue was up 17.7% on a year-over-year basis.

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Investors 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 annualized dividend and a yield of 0.8%. Microsoft’s dividend payout ratio (DPR) is currently 21.67%.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings and Azure growth: Microsoft reported adjusted EPS of $4.74 versus the $4.24 consensus and revenue of $90.01 billion versus expectations of $87.62 billion. Azure revenue grew 43%, ahead of forecasts, and annual Azure revenue surpassed $100 billion. The results helped ease concerns that AI infrastructure spending would pressure returns. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: AI monetization is gaining traction: Microsoft 365 Copilot surpassed 30 million paid seats, while the company described rising usage of AI agents and a shift toward consumption-based revenue. A $3.2 billion gain from its Anthropic investment also boosted quarterly results. Why Microsoft shares are trading higher
• Positive Sentiment: Visibility and spending discipline: Commercial remaining performance obligations reached a record $678 billion, up 84% year over year, although roughly one-third may be tied to OpenAI. Management indicated that capital spending remains flexible and forecast approximately $175 billion for calendar 2026, lower than the prior $190 billion projection because of accounting changes. Analysts raised targets, including RBC at $640, Goldman Sachs at $640, and BMO at $515. Microsoft’s backlog reaches $678 billion
• Neutral Sentiment: Concentration and competition risks: The potential dependence on OpenAI for a large portion of the backlog, along with Microsoft’s increasing competition with OpenAI and Anthropic, could create execution and customer-concentration risks despite strong demand.
• Negative Sentiment: Cloud-security and regulatory overhang: Alphabet-owned Wiz disclosed a vulnerability that could have exposed Microsoft cloud customers, while U.K. regulators are investigating Microsoft 365 subscription marketing. Separate investor class-action notices add further reputational and legal risk, though none has materially offset the earnings-driven optimism so far. Wiz reports Microsoft cloud vulnerability

Analysts Set New Price Targets

MSFT has been the subject of several analyst reports. China Renaissance lowered their price objective on Microsoft from $630.00 to $550.00 and set a “buy” rating for the company in a research note on Monday, May 4th. Phillip Securities upgraded Microsoft to a “buy” rating and set a $485.00 price target on the stock in a report on Wednesday, May 13th. New Street Research lowered their price target on Microsoft from $675.00 to $600.00 and set a “buy” rating for the company in a research report on Thursday, April 30th. Evercore set a $528.00 price objective on shares of Microsoft in a research note on Thursday. Finally, Dbs Bank reduced their target price on shares of Microsoft from $678.00 to $573.00 in a research note on Thursday, May 7th. Forty-two analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Microsoft presently has a consensus rating of “Moderate Buy” and a consensus price target of $558.64.

Insider Activity at Microsoft

In other Microsoft news, CEO Judson Althoff sold 15,500 shares of the company’s stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $460.99, for a total value of $7,145,345.00. Following the transaction, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. This represents a 12.30% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of Microsoft stock in a transaction on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the sale, the executive vice president directly owned 46,003 shares of the company’s stock, valued at approximately $18,922,874.02. This trade represents a 2.67% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 23,762 shares of company stock worth $10,508,361 in the last quarter. 0.03% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in the business. Vanguard Group Inc. grew its stake in Microsoft by 2.3% in the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock valued at $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. State Street Corp raised its stake in Microsoft by 2.1% in the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock worth $148,060,557,000 after acquiring an additional 6,388,930 shares during the last quarter. Geode Capital Management LLC lifted its position in Microsoft by 1.1% during the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock worth $88,056,019,000 after acquiring an additional 1,911,142 shares during the period. Morgan Stanley lifted its position in Microsoft by 0.8% during the 4th quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock worth $58,624,690,000 after acquiring an additional 980,439 shares during the period. Finally, Norges Bank purchased a new stake in Microsoft during the 4th quarter valued at about $50,664,631,000. Hedge funds and other institutional investors own 71.13% of the company’s stock.

Microsoft Stock Up 15.5%

The business has a fifty day moving average price of $396.43 and a two-hundred day moving average price of $405.74. 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 firm has a market capitalization of $3.35 trillion, a price-to-earnings ratio of 26.85, a price-to-earnings-growth ratio of 1.20 and a beta of 1.13.

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).