Microsoft (NASDAQ:MSFT) Shares Up 4.9% – Still a Buy?

Microsoft Corporation (NASDAQ:MSFT)’s stock price rose 4.9% during mid-day trading on Monday . The company traded as high as $491.65 and last traded at $487.65. 65,949,546 shares traded hands during mid-day trading, an increase of 74% from the average session volume of 37,962,578 shares. The stock had previously closed at $464.72.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth is driving bullish sentiment. Azure revenue surpassed $100 billion for fiscal 2026, with fourth-quarter growth accelerating to 43%. Total fiscal-year revenue reached $331.8 billion, up 18%, reinforcing the view that Microsoft’s substantial AI infrastructure spending is translating into cloud demand. Microsoft Azure Fiscal 2026 Sales Exceed $100B
• Positive Sentiment: Analysts raised their outlook. Tigress Financial increased its Microsoft price target from $680 to a Street-high $690, citing durable AI and cloud growth. Other commentary also argues that enterprise AI demand and Copilot monetization could support additional gains. Tigress Raises Microsoft Price Target
• Positive Sentiment: Microsoft is prioritizing OpenAI’s flagship model for coding. A CoreAI executive instructed developers to default to OpenAI’s GPT-5.6 Sol in GitHub Copilot projects, signaling deeper integration with OpenAI and a push to improve developer productivity and AI product efficiency. Microsoft AI Executive Memo on OpenAI Model
• Positive Sentiment: New AI infrastructure demand could expand customer relationships. Microsoft was identified as a customer in IREN’s reported $2.8 billion AI contracts, highlighting continued demand for data-center capacity across the AI ecosystem. IREN AI Contracts Including Microsoft
• Neutral Sentiment: Microsoft announced a healthcare AI partnership with Assuta Medical Centers, broadening potential applications for its technology, although the immediate financial impact is unclear. Microsoft and Assuta Medical Centers Partnership
• Negative Sentiment: Investors are taking profits after the rally. Microsoft’s strong earnings beat and accelerated Azure growth have already produced a sharp rebound, increasing concerns that expectations and valuation now discount much of the good news.
• Negative Sentiment: AI spending carries financial and execution risks. Microsoft is among several hyperscalers with roughly $1.09 trillion in future data-center lease commitments, raising scrutiny over capital intensity and long-term returns. AI Data-Center Lease Commitments
• Negative Sentiment: Multiple law firms are promoting a securities-fraud class action related to alleged misrepresentations about Copilot adoption and Azure growth. The August 11 lead-plaintiff deadline adds headline risk, though these notices do not represent a finding of wrongdoing. Microsoft Securities Class Action Notice

Analysts Set New Price Targets

A number of analysts have weighed in on MSFT shares. BNP Paribas Exane reduced their price target on Microsoft from $556.00 to $555.00 and set an “outperform” rating for the company in a research report on Friday, May 1st. Piper Sandler increased their price objective on Microsoft from $540.00 to $550.00 and gave the company an “overweight” rating in a report on Tuesday, July 28th. Citigroup reissued a “buy” rating and issued a $600.00 price objective (up from $570.00) on shares of Microsoft in a research note on Tuesday, July 28th. Dbs Bank reduced their target price on Microsoft from $678.00 to $573.00 in a report on Thursday, May 7th. Finally, HSBC decreased their target price on Microsoft from $593.00 to $571.00 in a research report on Thursday, April 30th. Forty-two investment analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $558.87.

Microsoft Price Performance

The stock has a market cap of $3.64 trillion, a price-to-earnings ratio of 27.32, a price-to-earnings-growth ratio of 1.57 and a beta of 1.11. The stock has a fifty day simple moving average of $400.91 and a 200-day simple moving average of $405.81. The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The company had revenue of $90.01 billion during the quarter, compared to analyst estimates of $87.62 billion. During the same period in the previous year, the company earned $3.65 earnings per share. The company’s quarterly revenue was up 17.7% compared to the same quarter last year. As a group, equities research analysts expect that Microsoft Corporation will post 19.56 EPS for the current year.

Microsoft Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be issued a $0.91 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a yield of 0.7%. Microsoft’s dividend payout ratio is 20.27%.

Insiders Place Their Bets

In related news, EVP Amy Coleman sold 1,262 shares of the stock in a transaction dated Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the completion of the sale, the executive vice president owned 46,003 shares in the company, valued at approximately $18,922,874.02. This trade represents a 2.67% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction dated 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 in the company, valued at approximately $50,928,792.23. This trade represents a 12.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 23,762 shares of company stock worth $10,508,361 in the last ninety days. Insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

A number of hedge funds have recently modified their holdings of the company. Longfellow Investment Management Co. LLC increased its stake in Microsoft by 51.3% in the second 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. Bernzott Capital Advisors acquired a new stake in Microsoft during the fourth quarter valued at approximately $34,000. Timmons Wealth Management LLC bought a new stake in shares of Microsoft in the 4th quarter valued at approximately $36,000. Fairway Wealth LLC raised its holdings in shares of Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after buying an additional 66 shares in the last quarter. Finally, Frankly Finances LLC bought a new position in shares of Microsoft during the 2nd quarter worth approximately $35,000. Institutional investors own 71.13% of the company’s stock.

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).