Microsoft (NASDAQ:MSFT) Shares Gap Up After Earnings Beat

Microsoft Corporation (NASDAQ:MSFT) shares gapped up prior to trading on Thursday following a stronger than expected earnings report. The stock had previously closed at $390.54, but opened at $437.90. Microsoft shares last traded at $447.0820, with a volume of 31,112,110 shares changing hands.

The software giant reported $4.74 earnings per share for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. During the same period in the prior year, the company posted $3.65 EPS. The firm’s revenue for the quarter was up 17.7% on a year-over-year basis.

Microsoft Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be paid a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is 21.67%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth exceeded expectations. Azure revenue rose 43% year over year, ahead of analysts’ roughly 40% forecast, and surpassed $100 billion in annual revenue. Intelligent Cloud revenue increased 32% to $39.3 billion, easing concerns that Microsoft’s AI infrastructure spending is outpacing customer demand. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: Microsoft beat on revenue and earnings. Fiscal fourth-quarter revenue reached $90.01 billion, up 17.7% year over year and above the $87.62 billion consensus estimate. Adjusted EPS of $4.74 exceeded expectations of $4.24, while net income increased approximately 31%. First-quarter fiscal 2027 revenue guidance of $89.9 billion to $91.0 billion was also above consensus. Microsoft fiscal fourth-quarter earnings
• Positive Sentiment: AI monetization showed further traction. Microsoft said Copilot surpassed 30 million paid seats, while management emphasized a future model combining subscriptions with usage-based consumption. The company also reported that AI demand continues to outpace capacity, supporting its long-term Azure outlook. Microsoft and Meta AI earnings reaction
• Positive Sentiment: Capital-spending concerns moderated. Microsoft held its AI capital-expenditure outlook steady and said GPU spending can be slowed if demand weakens. Extending data-center useful lives may also reduce depreciation pressure. The results prompted multiple analyst price-target increases, including BMO’s move to $515 and Goldman Sachs’ reported target of $640. Microsoft holds AI capital spending forecast
• Neutral Sentiment: Broader market conditions remain unsettled. The Federal Reserve held interest rates unchanged, but elevated inflation and a hawkish policy tone could continue to pressure high-growth technology valuations. Microsoft’s results helped lift technology and semiconductor shares. Market factors affecting stocks
• Negative Sentiment: Cloud-security and regulatory risks remain. Alphabet-owned Wiz disclosed a vulnerability that could have exposed Microsoft cloud customers, while U.K. regulators are investigating whether Microsoft misled customers about Microsoft 365 subscription options. These issues could create reputational, compliance, or remediation costs. Wiz cloud vulnerability report

Analyst Ratings Changes

A number of analysts recently issued reports on the stock. The Goldman Sachs Group restated a “buy” rating and issued a $640.00 price target on shares of Microsoft in a research note on Thursday. Citizens Jmp restated a “market outperform” rating and issued a $550.00 target price on shares of Microsoft in a research note on Tuesday. Wolfe Research reaffirmed an “outperform” rating and set a $550.00 price target on shares of Microsoft in a research report on Thursday. Barclays decreased their price target on Microsoft from $545.00 to $512.00 and set an “overweight” rating for the company in a research note on Thursday. Finally, Rothschild & Co Redburn cut their price objective on Microsoft from $450.00 to $400.00 and set a “neutral” rating on the stock in a research note on Thursday, April 23rd. Forty-two investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $556.20.

Insider Buying and Selling

In other Microsoft news, CEO Judson Althoff sold 15,500 shares of the stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the sale, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This trade represents a 12.30% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, EVP Takeshi Numoto sold 4,500 shares of the firm’s stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total value of $1,812,780.00. Following the completion of the sale, the executive vice president owned 47,468 shares in the company, valued at $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 23,762 shares of company stock valued at $10,508,361. Insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

A number of large investors have recently modified their holdings of the company. Longfellow Investment Management Co. LLC increased its position in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after acquiring an additional 20 shares during the period. Shepherd Kaplan Krochuk LLC grew its stake in shares of Microsoft by 4.9% in the third quarter. Shepherd Kaplan Krochuk LLC now owns 431 shares of the software giant’s stock worth $223,000 after purchasing an additional 20 shares in the last quarter. Fischer Investment Strategies LLC increased its holdings in shares of Microsoft by 3.1% during the fourth quarter. Fischer Investment Strategies LLC now owns 697 shares of the software giant’s stock valued at $337,000 after purchasing an additional 21 shares during the period. Pollock Investment Advisors LLC increased its holdings in shares of Microsoft by 0.8% during the third quarter. Pollock Investment Advisors LLC now owns 2,805 shares of the software giant’s stock valued at $1,453,000 after purchasing an additional 21 shares during the period. Finally, Better Money Decisions LLC raised its stake in shares of Microsoft by 0.6% during the second quarter. Better Money Decisions LLC now owns 3,498 shares of the software giant’s stock valued at $1,740,000 after purchasing an additional 21 shares in the last quarter. Institutional investors and hedge funds own 71.13% of the company’s stock.

Microsoft Trading Up 14.2%

The firm has a market capitalization of $3.31 trillion, a P/E ratio of 26.61, a PEG ratio of 1.20 and a beta of 1.13. The business’s 50 day moving average is $396.43 and its two-hundred day moving average is $405.74. 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 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).