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

Microsoft Corporation (NASDAQ:MSFT) reached a new 52-week high on Wednesday. The stock 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.

Key Headlines Impacting Microsoft

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

Analysts Set New Price Targets

Several research analysts have commented on MSFT shares. Needham & Company LLC initiated coverage on shares of Microsoft in a research note on Wednesday, September 23rd. They set a “buy” rating for the company. Melius Research upgraded Microsoft from a “hold” rating to a “buy” rating and set a $665.00 target price for the company in a research report on Monday, October 5th. JPMorgan Chase & Co. reissued a “buy” rating on shares of Microsoft in a research report on Monday, September 28th. Griffin Securities downgraded shares of Microsoft from a “buy” rating to a “neutral” rating in a research note on Thursday, October 29th. Finally, Cantor Fitzgerald raised their target price on shares of Microsoft from $608.00 to $630.00 and gave the stock an “overweight” rating in a research report on Thursday, October 29th. One equities research analyst has rated the stock with a Strong Buy rating, forty-five have issued a Buy rating and four have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $609.54.

Microsoft Stock Up 6.2%

The business has a 50 day moving average of $514.06 and a two-hundred day moving average of $438.92. The stock has a market capitalization of $4.11 trillion, a PE ratio of 28.89, a PEG ratio of 1.56 and a beta of 1.05. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.21 and a current ratio of 1.22.

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

Microsoft Increases Dividend

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

Insider Buying and Selling at Microsoft

In other Microsoft news, EVP Amy Hood sold 41,674 shares of the firm’s stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $498.27, for a total value of $20,764,903.98. Following the completion of the sale, the executive vice president owned 533,624 shares of the company’s stock, valued at approximately $265,888,830.48. This trade represents a 7.24% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Satya Nadella sold 86,525 shares of the company’s stock in a transaction dated 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 transaction, the chief executive officer owned 486,763 shares in the company, valued at approximately $244,092,173.98. This trade represents a 15.09% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 135,504 shares of company stock worth $68,138,024. 0.03% of the stock is owned by company insiders.

Institutional Investors Weigh In On Microsoft

Large investors have recently made changes to their positions in the stock. Empirical Financial Services LLC d.b.a. Empirical Wealth Management grew its holdings in shares of Microsoft by 4.0% during the 2nd quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management now owns 229,490 shares of the software giant’s stock worth $85,604,000 after acquiring an additional 8,773 shares during the period. D.B. Root & Company LLC bought a new position in shares of Microsoft in the 2nd quarter worth approximately $3,652,000. Dearborn Partners LLC purchased a new position in shares of Microsoft in the 2nd quarter valued at approximately $75,641,000. GTS Securities LLC lifted its stake in shares of Microsoft by 44.6% in the 2nd quarter. GTS Securities LLC now owns 271,597 shares of the software giant’s stock valued at $101,311,000 after purchasing an additional 83,734 shares during the period. Finally, Henson Edgewater Management LLC bought a new stake in shares of Microsoft during the second quarter valued at approximately $9,430,000. 71.13% of the stock is owned by hedge funds and other institutional investors.

Microsoft Company Profile

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.