Stock Traders Purchase Large Volume of Call Options on Microsoft (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was the target of some unusual options trading activity on Thursday. Stock investors purchased 943,367 call options on the stock. This represents an increase of approximately 16% compared to the average daily volume of 815,592 call options.

Microsoft Stock Performance

NASDAQ MSFT opened at $451.10 on Friday. The firm has a market cap of $3.35 trillion, a P/E ratio of 25.12, a P/E/G ratio of 1.20 and a beta of 1.13. Microsoft has a 52-week low of $349.20 and a 52-week high of $555.45. The business’s 50-day moving average price is $397.07 and its 200 day moving average price is $405.54. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08.

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. Microsoft had a return on equity of 33.07% and a net margin of 40.31%.The firm had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. During the same period in the prior year, the business earned $3.65 EPS. The firm’s revenue was up 17.7% compared to the same quarter last year. On average, equities research analysts expect that Microsoft will post 19.28 earnings per share for the current year.

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio is 21.67%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth exceeded expectations: Azure revenue increased 43%, ahead of roughly 40% analyst expectations, and annual Azure revenue surpassed $100 billion for the first time. The performance eased concerns that demand for AI infrastructure might be slowing. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: Strong earnings beat: Microsoft reported $4.74 in adjusted EPS versus a $4.24 consensus estimate and $90.01 billion in revenue versus expectations of $87.62 billion. Revenue rose 17.7% year over year, while profit increased about 31%. Microsoft fourth-quarter earnings
• Positive Sentiment: AI monetization is accelerating: Microsoft 365 Copilot surpassed 30 million paid seats, while management described the next growth phase as a “per seat plus consumption” model. Investors viewed Azure and Copilot adoption as evidence that AI investments are translating into commercial demand.
• Positive Sentiment: Spending concerns moderated: Microsoft held its capital-expenditure outlook broadly steady and said it expects continued cash generation in fiscal 2027. Management also said GPU spending could be adjusted if demand weakens, helping counter fears of unchecked AI-related cash burn. Microsoft keeps capex forecast unchanged
• Positive Sentiment: Backlog and analyst support improved: Commercial remaining performance obligations reached a record $678 billion, up 84% year over year. RBC, Goldman Sachs, BMO, TD Cowen and DA Davidson were among firms maintaining positive ratings or raising targets.
• Neutral Sentiment: Xbox strategy: New gaming chief Asha Sharma aims to exceed peers’ margins by 2030 through Minecraft investment and partnerships, including in China. The plan could support longer-term profitability but remains execution-dependent. Microsoft Xbox margin plan
• Negative Sentiment: Risks remain: Wiz reported a cloud vulnerability that could have exposed Microsoft customers, while U.K. regulators are investigating Microsoft 365 subscription marketing. Several securities-fraud law firms also publicized shareholder lawsuits. These developments are potential overhangs, although they did not offset the earnings-driven optimism.

Insider Activity

In related news, CEO Judson Althoff sold 15,500 shares of the business’s stock in a transaction on 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 completion of the sale, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at $50,928,792.23. The trade was a 12.30% decrease in their ownership of the stock. 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 the company’s 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 transaction, the executive vice president owned 46,003 shares of the company’s stock, valued at $18,922,874.02. This represents a 2.67% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 23,762 shares of company stock worth $10,508,361. Corporate insiders own 0.03% of the company’s stock.

Hedge Funds Weigh In On Microsoft

A number of hedge funds and other institutional investors have recently bought and sold shares of MSFT. Ahara Advisors LLC lifted its position in Microsoft by 359.9% in the second quarter. Ahara Advisors LLC now owns 56,035 shares of the software giant’s stock valued at $20,735,000 after purchasing an additional 43,852 shares during the period. Platform Technology Partners boosted its holdings in Microsoft by 7.4% in the 2nd quarter. Platform Technology Partners now owns 45,761 shares of the software giant’s stock valued at $17,070,000 after purchasing an additional 3,167 shares in the last quarter. Financial Perspectives Inc increased its position in Microsoft by 5.2% during the 2nd quarter. Financial Perspectives Inc now owns 35,154 shares of the software giant’s stock worth $13,113,000 after purchasing an additional 1,725 shares during the period. MBE Wealth Management LLC increased its position in Microsoft by 6.5% during the 2nd quarter. MBE Wealth Management LLC now owns 3,600 shares of the software giant’s stock worth $1,343,000 after purchasing an additional 220 shares during the period. Finally, SWP Financial LLC raised its stake in shares of Microsoft by 33.4% during the 2nd quarter. SWP Financial LLC now owns 1,030 shares of the software giant’s stock worth $384,000 after buying an additional 258 shares in the last quarter. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

MSFT has been the subject of several research reports. Jefferies Financial Group reissued a “buy” rating on shares of Microsoft in a report on Monday, May 4th. The Goldman Sachs Group restated a “buy” rating and set a $640.00 price target on shares of Microsoft in a research note on Thursday. New Street Research cut their price target on Microsoft from $675.00 to $600.00 and set a “buy” rating on the stock in a research report on Thursday, April 30th. TD Cowen reiterated a “buy” rating and issued a $540.00 price objective on shares of Microsoft in a research note on Thursday. Finally, DZ Bank reissued 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 assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average target price of $558.64.

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).