Microsoft (NASDAQ:MSFT) Shares Up 2.5% – Should You Buy?

Microsoft Corporation (NASDAQ:MSFT) was up 2.5% during trading on Thursday . The company traded as high as $501.56 and last traded at $499.86. 35,277,436 shares were traded during mid-day trading, a decline of 7% from the average daily volume of 37,956,461 shares. The stock had previously closed at $487.46.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Citi raised its Microsoft price target to $600. The upgrade follows Microsoft’s quarterly Azure performance, with analysts highlighting the 43% cloud-revenue increase and stronger-than-expected earnings as evidence that AI demand is translating into accelerating cloud growth. Citi Raises Microsoft Stock Target to $600
• Positive Sentiment: Microsoft’s custom AI chips may improve cloud economics. CEO Satya Nadella said the company’s internally developed chips can deliver efficiency gains of up to 40%. Better cost and energy efficiency could help Microsoft support AI workloads while protecting Azure margins. Microsoft Custom AI Chips Improve Efficiency
• Positive Sentiment: Azure is expanding in India. Microsoft opened a major Hyderabad data-center region and is committing approximately $20.5 billion to its Indian cloud and AI operations. Early customers include Adani Group and HDFC Bank, supporting the case for long-term international Azure growth. Microsoft Opens Largest India Data Center Hub
• Positive Sentiment: Fundamentals and institutional support remain strong. Microsoft recently exceeded quarterly revenue and EPS expectations, while Bill Ackman’s Pershing Square holds a reported $2.4 billion MSFT position. Scotiabank also raised its fiscal 2027 EPS estimate and maintained an Outperform rating. Bill Ackman Microsoft Stake
• Neutral Sentiment: AI demand is powerful but concentrated. Reports suggest OpenAI may account for a substantial portion of Microsoft’s AI sales, creating both a major growth engine and customer-concentration risk. Microsoft’s large AI backlog also does not guarantee equivalent future profitability.
• Negative Sentiment: Spending, margins and valuation remain concerns. Rising data-center capital expenditures and lower cloud gross margins could pressure cash flow if AI infrastructure costs grow faster than revenue. After the sharp post-earnings rally, the stock is also more vulnerable to profit-taking or disappointing guidance.
• Negative Sentiment: Insider sales and securities litigation add headline risk. CEO Judson Althoff sold 10,000 shares for roughly $4.9 million, and multiple law firms are publicizing a securities class action with an August 11 lead-plaintiff deadline. These developments do not establish wrongdoing but may weigh on near-term sentiment.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on MSFT. Weiss Ratings reiterated a “hold (c)” rating on shares of Microsoft in a research report on Monday, July 6th. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $640.00 price objective on shares of Microsoft in a research note on Thursday, July 30th. Arete Research lifted their target price on Microsoft from $730.00 to $870.00 and gave the stock a “buy” rating in a report on Tuesday, May 5th. Robert W. Baird decreased their target price on Microsoft from $540.00 to $500.00 and set an “outperform” rating for the company in a research note on Wednesday, April 15th. Finally, DZ Bank restated a “buy” rating on shares of Microsoft in a report on Thursday, April 30th. Forty-two investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $558.87.

Microsoft Trading Up 0.0%

The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The business’s fifty day moving average is $404.86 and its 200 day moving average is $406.96. The firm has a market capitalization of $3.71 trillion, a price-to-earnings ratio of 27.84, a price-to-earnings-growth ratio of 1.61 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion for the quarter, compared to analysts’ expectations of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The firm’s revenue was up 17.7% compared to the same quarter last year. During the same period in the previous year, the firm posted $3.65 EPS. Equities analysts predict that Microsoft Corporation will post 19.57 earnings per share for the current year.

Microsoft Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is currently 20.27%.

Insider Transactions at Microsoft

In other Microsoft news, EVP Amy Coleman sold 1,262 shares of the business’s stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $411.34, for a total value of $519,111.08. Following the sale, 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 position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, EVP Takeshi Numoto sold 4,810 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the transaction, the executive vice president directly owned 42,677 shares of the company’s stock, valued at approximately $21,188,276.96. This trade represents a 10.13% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 38,572 shares of company stock valued at $17,775,330 over the last three months. Company insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

Hedge funds and other institutional investors have recently made changes to their positions in the business. Norges Bank bought a new position in Microsoft in the fourth quarter valued at $50,664,631,000. Auto Owners Insurance Co lifted its position in Microsoft by 56,160.8% during the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock worth $29,073,486,000 after buying an additional 60,009,531 shares in the last quarter. Nuveen LLC bought a new stake in Microsoft during the 1st quarter worth about $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in shares of Microsoft by 500.0% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after buying an additional 49,618,571 shares during the last quarter. Finally, Laurel Wealth Advisors LLC grew its holdings in shares of Microsoft by 49,640.3% in the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock valued at $14,905,904,000 after acquiring an additional 29,906,791 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors and hedge funds.

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).