Microsoft Target of Unusually High Options Trading (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was the recipient of some unusual options trading activity on Friday. Traders acquired 1,410,050 call options on the stock. This is an increase of 70% compared to the average daily volume of 827,515 call options.

Microsoft Trading Up 5.4%

Shares of MSFT stock opened at $450.24 on Friday. Microsoft has a 52-week low of $356.28 and a 52-week high of $555.45. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The company has a 50-day simple moving average of $402.09 and a two-hundred day simple moving average of $434.62. The company has a market capitalization of $3.34 trillion, a price-to-earnings ratio of 26.80, a PEG ratio of 1.54 and a beta of 1.10.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, topping 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 business had revenue of $82.89 billion during the quarter, compared to the consensus estimate of $81.44 billion. During the same period in the prior year, the firm posted $3.46 EPS. The firm’s quarterly revenue was up 18.3% compared to the same quarter last year. Research analysts anticipate that Microsoft will post 16.76 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be paid a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, May 21st. Microsoft’s payout ratio is presently 21.67%.

Insider Buying and Selling at Microsoft

In other Microsoft news, EVP Kathleen T. Hogan sold 12,321 shares of Microsoft stock in a transaction on Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the sale, the executive vice president directly owned 137,933 shares of the company’s stock, valued at approximately $56,486,322.16. The trade was a 8.20% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through 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 transaction of $519,111.08. Following the completion of 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. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Ramiah Investment Group boosted its stake in Microsoft by 2.2% in the first quarter. Ramiah Investment Group now owns 1,445 shares of the software giant’s stock valued at $535,000 after acquiring an additional 31 shares during the last quarter. Mullaney Keating & Wright Inc. boosted its stake in Microsoft by 1.2% in the first quarter. Mullaney Keating & Wright Inc. now owns 2,445 shares of the software giant’s stock valued at $905,000 after acquiring an additional 29 shares during the last quarter. Ipsen Advisor Group LLC boosted its stake in Microsoft by 2.0% in the first quarter. Ipsen Advisor Group LLC now owns 2,754 shares of the software giant’s stock valued at $1,019,000 after acquiring an additional 54 shares during the last quarter. Prospect Capital Advisors LLC boosted its stake in Microsoft by 27.9% in the first quarter. Prospect Capital Advisors LLC now owns 14,720 shares of the software giant’s stock valued at $5,449,000 after acquiring an additional 3,215 shares during the last quarter. Finally, Krane Financial Solutions LLC purchased a new position in Microsoft in the first quarter valued at about $540,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

Several research firms have weighed in on MSFT. William Blair reaffirmed an “outperform” rating on shares of Microsoft in a research note on Monday, March 9th. Weiss Ratings downgraded shares of Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, March 24th. Stifel Nicolaus lifted their price target on shares of Microsoft from $392.00 to $415.00 and gave the company a “hold” rating in a research note on Thursday, April 30th. TD Cowen raised shares of Microsoft from a “buy” rating to a “hold” rating in a research note on Tuesday, May 5th. Finally, Tigress Financial boosted their target price on shares of Microsoft from $595.00 to $680.00 and gave the stock a “buy” rating in a research report on Wednesday, May 6th. Thirty-nine equities research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $560.88.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft and Nvidia teased “a new era of PC,” with reports pointing to new Surface hardware and a possible AI-focused chip announcement at Computex, which could refresh the Windows/PC upgrade cycle. Article Title
• Positive Sentiment: Reports that Microsoft will unveil a new coding model and other in-house AI tools at next week’s Build conference reinforce the company’s AI monetization story and support sentiment around GitHub Copilot and Azure demand. Article Title
• Positive Sentiment: Microsoft’s latest earnings backdrop remains solid, with revenue growth of 18.3% and better-than-expected EPS, helping investors justify the stock’s premium valuation.
• Positive Sentiment: Several bullish writeups and analyst commentary say MSFT still has room to run because Azure, M365 cloud, and AI revenue are expanding faster than the broader software market. Article Title
• Neutral Sentiment: Microsoft is also drawing attention from investors, fund managers, and even congressional buyers, which supports the stock’s defensive-growth reputation but does not change fundamentals on its own.
• Negative Sentiment: A TechCrunch report says Microsoft is facing backlash for threatening a security researcher over unpatched bugs and code disclosure, adding some reputational noise ahead of Build. Article Title

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).