Microsoft (NASDAQ:MSFT) Stock Price Up 15.5% After Earnings Beat

Microsoft Corporation (NASDAQ:MSFT)’s stock price rose 15.5% on Thursday following a stronger than expected earnings report. The stock traded as high as $458.69 and last traded at $451.10. 109,445,388 shares were traded during trading, an increase of 191% from the average session volume of 37,615,195 shares. The stock had previously closed at $390.54.

The software giant reported $4.74 earnings per share for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. The firm had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The business’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the business earned $3.65 earnings per share.

Microsoft Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued 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 of this dividend is Thursday, August 20th. Microsoft’s payout ratio is 21.67%.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Strong earnings and Azure growth: Microsoft reported adjusted EPS of $4.74 versus the $4.24 consensus and revenue of $90.01 billion versus expectations of $87.62 billion. Azure revenue grew 43%, ahead of forecasts, and annual Azure revenue surpassed $100 billion. The results helped ease concerns that AI infrastructure spending would pressure returns. Microsoft tops quarterly cloud growth estimates
• Positive Sentiment: AI monetization is gaining traction: Microsoft 365 Copilot surpassed 30 million paid seats, while the company described rising usage of AI agents and a shift toward consumption-based revenue. A $3.2 billion gain from its Anthropic investment also boosted quarterly results. Why Microsoft shares are trading higher
• Positive Sentiment: Visibility and spending discipline: Commercial remaining performance obligations reached a record $678 billion, up 84% year over year, although roughly one-third may be tied to OpenAI. Management indicated that capital spending remains flexible and forecast approximately $175 billion for calendar 2026, lower than the prior $190 billion projection because of accounting changes. Analysts raised targets, including RBC at $640, Goldman Sachs at $640, and BMO at $515. Microsoft’s backlog reaches $678 billion
• Neutral Sentiment: Concentration and competition risks: The potential dependence on OpenAI for a large portion of the backlog, along with Microsoft’s increasing competition with OpenAI and Anthropic, could create execution and customer-concentration risks despite strong demand.
• Negative Sentiment: Cloud-security and regulatory overhang: Alphabet-owned Wiz disclosed a vulnerability that could have exposed Microsoft cloud customers, while U.K. regulators are investigating Microsoft 365 subscription marketing. Separate investor class-action notices add further reputational and legal risk, though none has materially offset the earnings-driven optimism so far. Wiz reports Microsoft cloud vulnerability

Analyst Ratings Changes

A number of research firms have recently commented on MSFT. Deutsche Bank Aktiengesellschaft restated a “buy” rating on shares of Microsoft in a research report on Monday, July 20th. Evercore set a $528.00 target price on Microsoft in a report on Thursday. President Capital upped their price objective on shares of Microsoft from $500.00 to $520.00 and gave the company a “buy” rating in a report on Thursday, April 30th. Citigroup reaffirmed a “buy” rating and set a $600.00 price target (up from $570.00) on shares of Microsoft in a research report on Tuesday. Finally, Wedbush reaffirmed an “outperform” rating and issued a $575.00 target price on shares of Microsoft in a research report on Wednesday, May 13th. Forty-two analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, Microsoft has a consensus rating of “Moderate Buy” and an average price target of $558.64.

Insider Activity

In related news, EVP Amy Coleman sold 1,262 shares of the company’s stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $411.34, for a total value of $519,111.08. Following the completion of the transaction, the executive vice president directly owned 46,003 shares of the company’s stock, valued at $18,922,874.02. This represents a 2.67% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, EVP Takeshi Numoto sold 4,500 shares of the company’s stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the completion of the transaction, the executive vice president owned 47,468 shares of the company’s stock, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in MSFT. Norges Bank purchased a new stake in Microsoft in the 4th quarter valued at $50,664,631,000. Auto Owners Insurance Co boosted its stake in shares of Microsoft by 56,160.8% during the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock worth $29,073,486,000 after buying an additional 60,009,531 shares during the period. Nuveen LLC acquired a new position in Microsoft in the 1st quarter valued at about $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its position in Microsoft by 500.0% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after acquiring an additional 49,618,571 shares during the period. Finally, Laurel Wealth Advisors LLC increased its holdings in shares of Microsoft by 49,640.3% in the second quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock valued at $14,905,904,000 after purchasing an additional 29,906,791 shares during the period. Hedge funds and other institutional investors own 71.13% of the company’s stock.

Microsoft Trading Up 15.5%

The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08. The company has a fifty day moving average of $396.43 and a two-hundred day moving average of $405.74. The stock has a market capitalization of $3.35 trillion, a price-to-earnings ratio of 26.85, a P/E/G ratio of 1.20 and a beta of 1.13.

About Microsoft

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).