Investors Buy Large Volume of Microsoft Call Options (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) saw some unusual options trading activity on Thursday. Stock investors bought 943,699 call options on the stock. This represents an increase of approximately 31% compared to the typical volume of 719,159 call options.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q3 results and the earnings call highlighted 40%+ Azure/cloud growth and accelerating AI monetization, giving investors confidence in the company’s long-term AI revenue runway. Microsoft Earnings Call: AI Growth Surges, Margins Squeezed
• Positive Sentiment: The U.S. Pentagon signed agreements allowing Microsoft’s AI tech on classified networks — a credibility and contract win that can translate into long-term, high?value government revenue. Pentagon inks deals with Nvidia, Microsoft and AWS to deploy AI on classified networks
• Positive Sentiment: Analyst actions include several price?target raises and reaffirmations (Benchmark raised to $525, others keep buy ratings), signaling continued bullish conviction among some buy?side firms. Microsoft Corp. (MSFT) Price Target Increased to $525 by Benchmark
• Positive Sentiment: Product catalyst: rollout of Windows 11’s new Xbox Mode supports consumer engagement and adds a near?term, tangible product story for the stock. Microsoft Stock (MSFT) Jumps on Windows 11 Xbox Mode Rollout
• Neutral Sentiment: The revised Microsoft–OpenAI relationship (ending exclusivity) is being parsed by markets: it reduces some exclusivity upside but clarifies commercial terms that could be neutral-to-positive longer term depending on monetization. Microsoft and OpenAI Just Ended Their Exclusive Deal, and Wall Street Is Trying Hard to Shake Off the Negatives for MSFT Stock
• Neutral Sentiment: Commentary from TV/hosts (e.g., Jim Cramer) describes MSFT as attractively valued but notes limited new messaging on the call — this shapes retail sentiment but isn’t new fundamental data. Jim Cramer on Microsoft: “Maybe You Can Consider It Cheap, But It’s Software”
• Negative Sentiment: Investors remain focused on record capex (roughly $190B guidance) and the near?term hit to free cash flow — that spending narrative caused the post?earnings pullback and continues to cap the multiple. Beat meets bill: MSFT stock slips on AI expenditure concerns despite strong Q3
• Negative Sentiment: Goldman’s note flagging extreme cloud cash burn and other outlets highlighting the industry’s rising AI capex raises concern that spending could pressure margins and returns if monetization lags. Microsoft, Amazon On Watch ? Goldman Sounds Alarm On 90% Cloud Cash Burn
• Negative Sentiment: Some brokers trimmed price targets or cut upside on valuation as they bake in capex risk (HSBC cut its target), keeping a portion of the market cautious. HSBC Cuts Microsoft Price Target to $571 From $593

Microsoft Price Performance

NASDAQ:MSFT opened at $414.41 on Friday. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.38 and a current ratio of 1.28. The stock’s 50-day simple moving average is $395.28 and its 200 day simple moving average is $448.37. The company has a market cap of $3.08 trillion, a P/E ratio of 24.67, a P/E/G ratio of 1.53 and a beta of 1.10. Microsoft has a 52-week low of $356.28 and a 52-week high of $555.45.

Microsoft (NASDAQ:MSFT) last released its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.06 by $0.21. The business had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.Microsoft’s quarterly revenue was up 18.3% on a year-over-year basis. During the same quarter in the previous year, the business earned $3.46 earnings per share. As a group, sell-side analysts forecast that Microsoft will post 16.6 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be given a $0.91 dividend. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. Microsoft’s payout ratio is currently 22.76%.

Insider Buying and Selling at Microsoft

In other Microsoft news, Director John W. Stanton bought 5,000 shares of the company’s stock in a transaction on Wednesday, February 18th. The stock was bought at an average price of $397.35 per share, for a total transaction of $1,986,750.00. Following the transaction, the director owned 83,905 shares of the company’s stock, valued at approximately $33,339,651.75. The trade was a 6.34% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the company’s stock in a transaction on Friday, March 6th. The shares were sold at an average price of $409.52, for a total transaction of $5,045,695.92. Following the sale, the executive vice president owned 137,933 shares of the company’s stock, valued at $56,486,322.16. The trade was a 8.20% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

Hedge funds and other institutional investors have recently modified their holdings of the stock. WFA Asset Management Corp raised its stake in Microsoft by 27.0% in the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant’s stock valued at $427,000 after buying an additional 216 shares during the period. Ironwood Wealth Management LLC. raised its stake in Microsoft by 0.3% in the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant’s stock valued at $5,658,000 after buying an additional 38 shares during the period. Discipline Wealth Solutions LLC raised its stake in Microsoft by 410.4% in the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant’s stock valued at $1,144,000 after buying an additional 2,138 shares during the period. Wealth Group Ltd. raised its stake in Microsoft by 1.2% in the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant’s stock valued at $1,000,000 after buying an additional 28 shares during the period. Finally, Eagle Capital Management LLC raised its stake in Microsoft by 0.4% in the fourth quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant’s stock valued at $9,735,000 after buying an additional 96 shares during the period. Institutional investors and hedge funds own 71.13% of the company’s stock.

Analyst Ratings Changes

A number of analysts recently commented on the stock. Rothschild & Co Redburn lowered their price objective on shares of Microsoft from $450.00 to $400.00 and set a “neutral” rating for the company in a research report on Thursday, April 23rd. Stifel Nicolaus upped their price objective on shares of Microsoft from $392.00 to $415.00 and gave the company a “hold” rating in a research report on Thursday. Weiss Ratings cut shares of Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Tuesday, March 24th. The Goldman Sachs Group restated a “buy” rating on shares of Microsoft in a research report on Thursday. Finally, Scotiabank lowered their price objective on shares of Microsoft from $600.00 to $550.00 and set an “outperform” rating for the company in a research report on Thursday. One research analyst has rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat.com, Microsoft currently has a consensus rating of “Moderate Buy” and a consensus target price of $556.15.

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).