Microsoft (NASDAQ:MSFT) Hits New 1-Year High – Should You Buy?

Shares of Microsoft Corporation (NASDAQ:MSFT) hit a new 52-week high during trading on Wednesday. The company traded as high as $551.81 and last traded at $555.8510, with a volume of 7,332,986 shares changing hands. The stock had previously closed at $520.99.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft is reportedly the only hyperscaler forecasting positive free cash flow next year. That relative advantage could reassure investors that it can fund AI expansion without relying as heavily on borrowing or other financing. What’s Going on With Microsoft Stock?
• Positive Sentiment: Recent coverage highlighted 48% Azure growth, supported by strong AI demand that currently exceeds available capacity. Continued cloud growth strengthens the case that Microsoft’s AI investments can generate revenue. What’s Going on with Microsoft Stock on Tuesday?
• Neutral Sentiment: OpenAI plans to acquire developer-tools startup Pierre Computer, whose technology is already used in Codex. The report frames the move as targeting Microsoft’s GitHub, raising a potential competitive issue, but does not detail a direct impact on Microsoft’s business. Exclusive: OpenAI targets Microsoft’s GitHub with deal for startup
• Negative Sentiment: Microsoft’s large AI infrastructure bill remains a concern: coverage cited $45.2 billion in quarterly capital spending, largely for AI. Investors may question how quickly those investments will pay off, even as cloud demand grows. 5 questions to ask if your boss offers you a buyout, as Microsoft did with 60,000 employees

Wall Street Analyst Weigh In

Several research analysts recently issued reports on MSFT shares. Evercore upgraded shares of Microsoft from an “underperform” rating to an “outperform” rating in a research note on Monday, October 5th. Jefferies Financial Group upped their price objective on shares of Microsoft from $575.00 to $650.00 and gave the stock a “buy” rating in a report on Wednesday, October 14th. Stifel Nicolaus boosted their price target on Microsoft from $575.00 to $650.00 and gave the stock a “buy” rating in a research report on Thursday, October 29th. Weiss Ratings upgraded Microsoft from a “hold (c+)” rating to a “buy (b-)” rating in a research note on Thursday, October 8th. Finally, Truist Financial reiterated a “buy” rating and set a $630.00 price objective (up from $600.00) on shares of Microsoft in a research note on Thursday, October 29th. One analyst has rated the stock with a Strong Buy rating, forty-five have given a Buy rating and four have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Microsoft presently has an average rating of “Moderate Buy” and a consensus price target of $609.54.

Microsoft Stock Up 6.2%

The company has a market cap of $4.11 trillion, a P/E ratio of 28.89, a P/E/G ratio of 1.56 and a beta of 1.05. The company’s 50-day moving average is $514.06 and its two-hundred day moving average is $438.92. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.22 and a quick ratio of 1.21.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.72 by $0.17. Microsoft had a return on equity of 31.28% and a net margin of 41.17%. The business had revenue of $92.28 billion for the quarter, compared to analysts’ expectations of $90.62 billion. During the same period in the prior year, the firm posted $4.13 EPS. The firm’s quarterly revenue was up 18.8% on a year-over-year basis. As a group, equities analysts predict that Microsoft Corporation will post 19.86 earnings per share for the current fiscal year.

Microsoft Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Thursday, November 19th will be given a $0.98 dividend. This is a positive change from Microsoft’s previous quarterly dividend of $0.91. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $3.92 dividend on an annualized basis and a yield of 0.7%. Microsoft’s payout ratio is presently 19.00%.

Insider Activity

In other news, CEO Satya Nadella sold 86,525 shares of the business’s stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the completion of the transaction, the chief executive officer directly owned 486,763 shares of the company’s stock, valued at $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Amy Hood sold 41,674 shares of the business’s stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $498.27, for a total transaction of $20,764,903.98. Following the transaction, the executive vice president directly owned 533,624 shares of the company’s stock, valued at $265,888,830.48. The trade was a 7.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 135,504 shares of company stock worth $68,138,024 in the last 90 days. Company insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

A number of large investors have recently added to or reduced their stakes in MSFT. Sullivan Wood Capital Management LLC boosted its holdings in Microsoft by 3.2% in the 3rd quarter. Sullivan Wood Capital Management LLC now owns 647 shares of the software giant’s stock worth $332,000 after buying an additional 20 shares during the period. Narus Financial Partners LLC raised its holdings in Microsoft by 0.4% during the third quarter. Narus Financial Partners LLC now owns 4,487 shares of the software giant’s stock valued at $2,301,000 after acquiring an additional 20 shares during the period. Box Hill Private Wealth LLC raised its holdings in Microsoft by 0.5% during the second quarter. Box Hill Private Wealth LLC now owns 4,272 shares of the software giant’s stock valued at $1,593,000 after acquiring an additional 21 shares during the period. PMG Family Office LLC lifted its position in shares of Microsoft by 1.0% in the third quarter. PMG Family Office LLC now owns 2,063 shares of the software giant’s stock valued at $1,058,000 after acquiring an additional 21 shares in the last quarter. Finally, Dynamic Financial Group lifted its position in shares of Microsoft by 1.5% in the third quarter. Dynamic Financial Group now owns 1,439 shares of the software giant’s stock valued at $738,000 after acquiring an additional 21 shares in the last quarter. Institutional investors own 71.13% of the company’s stock.

About Microsoft

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company’s principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.