Microsoft (NASDAQ:MSFT) Stock Jumps 1.1% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) shares were up 1.1% during trading on Monday. The company traded as high as $542.74 and last traded at $541.15. Approximately 18,028,736 shares traded hands during mid-day trading, a decline of 47% from the average session volume of 34,268,449 shares. The stock had previously closed at $535.07.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft unveiled its third-generation Maia 300 AI processor and said it plans to begin production deployments in 2027, eventually scaling the Maia platform to multi-gigawatt deployments. Management says the system could deliver approximately 40% more AI-generated tokens per megawatt than leading GPU-based systems, potentially improving Azure’s margins and easing semiconductor supply constraints. Microsoft to rely more on homegrown AI chips, reducing dependence on Nvidia
• Positive Sentiment: The custom-chip strategy is being viewed as a direct effort to control AI infrastructure costs and improve cloud efficiency. Microsoft expects Maia to become its primary architecture for running AI models, strengthening the long-term investment case for Azure and helping explain the stock’s advance. Microsoft Unveils Maia 300 AI Chip
• Positive Sentiment: Recent bullish commentary highlights Azure growth, rising Copilot usage, a record backlog and Microsoft’s diversified enterprise-software base. Investors are also looking ahead to the October 28 earnings report, where Azure growth of roughly 44%–45% and elevated AI capital spending will be key tests. Microsoft Needs Azure to Keep Growing Faster Than 40%

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on MSFT. Royal Bank Of Canada restated an “outperform” rating on shares of Microsoft in a research report on Thursday, September 10th. Tigress Financial increased their target price on Microsoft from $680.00 to $690.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Evercore raised Microsoft from an “underperform” rating to an “outperform” rating in a research note on Monday, October 5th. Needham & Company LLC assumed coverage on Microsoft in a research note on Wednesday, September 23rd. They set a “buy” rating on the stock. Finally, Cantor Fitzgerald boosted their price target on Microsoft from $522.00 to $608.00 and gave the stock an “overweight” rating in a report on Monday, September 21st. Forty-two research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, Microsoft presently has a consensus rating of “Moderate Buy” and a consensus target price of $579.84.

Microsoft Stock Up 1.1%

The stock has a 50-day moving average price of $501.15 and a 200-day moving average price of $435.10. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The company has a market capitalization of $4.02 trillion, a P/E ratio of 30.13, a P/E/G ratio of 1.72 and a beta of 1.10.

Microsoft (NASDAQ:MSFT) last announced its earnings results 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 return on equity of 31.98% and a net margin of 40.31%. The firm’s revenue was up 17.7% on a year-over-year basis. During the same period in the prior year, the business posted $3.65 earnings per share. On average, research analysts predict that Microsoft Corporation will post 19.65 EPS for the current fiscal year.

Microsoft Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be paid a $0.98 dividend. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $3.92 dividend on an annualized basis and a dividend yield of 0.7%. This is an increase from Microsoft’s previous quarterly dividend of $0.91. Microsoft’s payout ratio is currently 21.83%.

Insiders Place Their Bets

In related news, CEO Judson Althoff sold 10,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the completion of the sale, the chief executive officer owned 100,447 shares of the company’s stock, valued at $49,007,086.83. This trade represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction that occurred on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the sale, the chief executive officer owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 143,009 shares of company stock valued at $71,420,699. 0.03% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Microsoft

A number of institutional investors and hedge funds have recently modified their holdings of the business. Bank of America Corp DE bought a new position in Microsoft in the 2nd quarter valued at about $27,338,370,000. Auto Owners Insurance Co boosted its stake 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 valued at $29,073,486,000 after purchasing an additional 60,009,531 shares during the last quarter. Legal & General Group Plc bought a new stake in Microsoft during the 2nd quarter worth approximately $18,306,443,000. Jupiter Topco LLC bought a new stake in Microsoft during the 2nd quarter worth approximately $6,928,664,000. Finally, Canada Pension Plan Investment Board purchased a new stake in shares of Microsoft in the second quarter worth approximately $5,653,812,000. 71.13% of the stock is currently owned by institutional investors.

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft’s productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.