Microsoft (NASDAQ:MSFT) Stock Jumps 6.7% – Still a Buy?

Microsoft Corporation (NASDAQ:MSFT) shares rose 6.7% on Wednesday. The company traded as high as $559.15 and last traded at $555.80. Approximately 50,628,583 shares were traded during trading, an increase of 51% from the average session volume of 33,471,840 shares. The stock had previously closed at $520.99.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: A post-election rally and easing political uncertainty helped lift major technology stocks. Some investors also see the prospect of slower data-center expansion as potentially limiting competition for established cloud providers. Article: Microsoft Stock Hits Record High as Midterm Results Boost AI Infrastructure Bets
• Positive Sentiment: Recent results beat analysts’ estimates, with revenue up 19% year over year, while Azure growth accelerated to 48%. Reports also highlighted strong AI demand, more than 30 million paid Microsoft 365 Copilot seats, and a $677 billion commercial backlog—supporting expectations that AI investment can translate into future cloud revenue. Article: MSFT Q1 Earnings Call Highlights Azure Growth and AI Spending
• Positive Sentiment: Analysts have defended bullish outlooks, with reports citing price targets as high as $722 and pointing to Azure’s momentum and Microsoft’s potential to earn returns on AI development. Article: What’s Going on With Microsoft Stock on Wednesday?
• Neutral Sentiment: Midterm results have prompted concerns about tighter limits on AI data centers, which could affect industry expansion. For now, investors appear more focused on cloud demand and the broader technology rebound. Article: Why are Amazon, Microsoft stocks surging 6% today?
• Negative Sentiment: Heavy AI infrastructure spending remains a key risk: high capital costs could pressure free cash flow and margins before the investments generate enough returns. A Seeking Alpha article downgraded the stock, cautioning investors not to overstate the significance of positive free cash flow. Article: Microsoft: Don’t Get Too Excited About Its Positive FCF (Rating Downgrade)

Analyst Upgrades and Downgrades

Several brokerages have issued reports on MSFT. KeyCorp set a $625.00 target price on Microsoft in a report on Thursday, October 29th. Yorkville Ives initiated coverage on Microsoft in a report on Monday, October 5th. They issued an “outperform” rating and a $615.00 price objective on the stock. Deutsche Bank Aktiengesellschaft reiterated a “buy” rating and issued a $600.00 price objective on shares of Microsoft in a research note on Monday, October 12th. Royal Bank Of Canada restated an “outperform” rating and issued a $640.00 price objective on shares of Microsoft in a report on Thursday, October 29th. Finally, TD Cowen upped their price target on Microsoft from $625.00 to $650.00 and gave the company a “buy” rating in a 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 issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $609.54.

Microsoft Stock Performance

The stock’s 50-day moving average price is $514.06 and its 200-day moving average price is $438.92. The company has a market capitalization of $4.13 trillion, a price-to-earnings ratio of 29.01, a P/E/G 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 issued its quarterly earnings data on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.72 by $0.17. Microsoft had a return on equity of 31.28% and a net margin of 41.17%. The firm had revenue of $92.28 billion during the quarter, compared to the consensus estimate of $90.62 billion. During the same period in the previous year, the firm posted $4.13 EPS. The company’s quarterly revenue was up 18.8% compared to the same quarter last year. As a group, equities research analysts expect that Microsoft Corporation will post 19.86 earnings per share for the current year.

Microsoft Increases Dividend

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

Insiders Place Their Bets

In related news, EVP Amy Hood sold 7,305 shares of the company’s stock in a transaction on Tuesday, October 13th. The shares were sold at an average price of $545.42, for a total value of $3,984,293.10. Following the sale, the executive vice president directly owned 555,396 shares of the company’s stock, valued at $302,924,086.32. This represents a 1.30% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction dated Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the transaction, the chief executive officer owned 486,763 shares of the company’s stock, valued at $244,092,173.98. This trade represents a 15.09% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 135,504 shares of company stock valued at $68,138,024. 0.03% of the stock is owned by corporate insiders.

Institutional Trading of Microsoft

Hedge funds have recently made changes to their positions in the stock. Bank of America Corp DE purchased a new stake in Microsoft in the 2nd quarter worth about $27,338,370,000. Legal & General Group Plc bought a new position in shares of Microsoft during the 2nd quarter valued at $18,306,443,000. Jupiter Topco LLC acquired a new stake in shares of Microsoft in the second quarter worth about $6,928,664,000. Canada Pension Plan Investment Board acquired a new stake in Microsoft in the 2nd quarter worth approximately $5,653,812,000. Finally, The Manufacturers Life Insurance Company bought a new stake in shares of Microsoft during the 2nd quarter worth $4,000,706,000. Institutional investors own 71.13% of the company’s stock.

About Microsoft

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.