Microsoft Sees Unusually Large Options Volume (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was the target of unusually large options trading activity on Friday. Stock traders bought 586,432 call options on the company. This is an increase of 56% compared to the typical daily volume of 376,264 call options.

Analyst Upgrades and Downgrades

Several analysts have recently issued reports on MSFT shares. Cantor Fitzgerald reissued an “overweight” rating and set a $590.00 target price on shares of Microsoft in a report on Thursday. Redburn Partners set a $450.00 price objective on shares of Microsoft in a research note on Wednesday, January 21st. Morgan Stanley restated an “overweight” rating on shares of Microsoft in a research report on Thursday. TD Cowen reaffirmed a “buy” rating on shares of Microsoft in a report on Thursday. Finally, BNP Paribas Exane lifted their price target on Microsoft from $632.00 to $659.00 and gave the company an “outperform” rating in a research note on Tuesday, January 27th. One analyst has rated the stock with a Strong Buy rating, forty have assigned a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, Microsoft presently has an average rating of “Moderate Buy” and a consensus price target of $597.73.

Microsoft Trading Down 0.7%

NASDAQ MSFT opened at $430.29 on Friday. The company has a market cap of $3.20 trillion, a price-to-earnings ratio of 26.91, a price-to-earnings-growth ratio of 1.74 and a beta of 1.07. Microsoft has a twelve month low of $344.79 and a twelve month high of $555.45. The company has a quick ratio of 1.39, a current ratio of 1.39 and a debt-to-equity ratio of 0.09. The business’s fifty day moving average is $475.83 and its 200 day moving average is $499.66.

Microsoft (NASDAQ:MSFT) last posted its earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating the consensus estimate of $3.86 by $0.28. Microsoft had a return on equity of 32.34% and a net margin of 39.04%.The firm had revenue of $81.27 billion during the quarter, compared to the consensus estimate of $80.28 billion. During the same period last year, the company earned $3.23 earnings per share. The business’s quarterly revenue was up 16.7% on a year-over-year basis. As a group, sell-side analysts expect that Microsoft will post 13.08 EPS for the current fiscal year.

Microsoft Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a dividend of $0.91 per share. The ex-dividend date is Thursday, February 19th. This represents a $3.64 annualized dividend and a yield of 0.8%. Microsoft’s dividend payout ratio (DPR) is currently 22.76%.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Large commercial deals and partnerships underpin continued demand — Microsoft landed a major cloud customer agreement (Perplexity, reported as a $750M deal), which demonstrates Azure can win sizable AI workloads and supports future revenue. Perplexity signs $750 million AI cloud deal with Microsoft
• Positive Sentiment: Long-term AI opportunity remains large — analysts and commentators note that potential liquidity events (e.g., an OpenAI IPO) and continued hyperscaler AI demand could boost infrastructure spending that benefits Microsoft’s cloud and services over time. Could A $1 Trillion OpenAI IPO Save The Day For Nvidia, Microsoft?
• Positive Sentiment: Backlog/RPO growth signals demand — Microsoft’s commercial remaining performance obligations (backlog) jumped materially year-over-year, implying multi-year contracted revenue tied to AI workloads. Microsoft demand backlog doubles to $625 billion
• Neutral Sentiment: Quarterly results were solid but mixed — MSFT beat on revenue and EPS (Q2 results) yet the company issued guidance and commentary that implied a modest moderation in Azure growth vs. prior quarter; the market is parsing growth vs. the cost profile. Microsoft Q2 earnings beat on top and bottom lines
• Neutral Sentiment: Options and sentiment flows amplify moves — unusually high call-option buying and heavy volume have increased intraday volatility and may accentuate both selloffs and snapbacks. Stock Of The Day: Is This The Bottom For Microsoft?
• Negative Sentiment: Investor backlash to capex and margin risk — the core negative: investors punished MSFT because AI capex jumped (reported ~$37.5B in the quarter) while Azure growth showed signs of slowing, raising doubts about near-term returns. That drove a sharp selloff and a big market-cap contraction. Microsoft tumbled 10% in a day and isn’t recovering premarket. Here’s why
• Negative Sentiment: Analyst cuts & guidance uncertainty — several firms trimmed price targets or flagged near-term Azure/margin risks, increasing downside pressure even as many maintain buy ratings longer term. These Analysts Slash Their Forecasts On Microsoft Following Q2 Results
• Negative Sentiment: Legal/investor scrutiny follows the shock drop — law firms have opened investigations and class-action notices have surfaced, which can keep sentiment fragile near-term. Microsoft Corporation Investigated on Behalf of Investors

Insiders Place Their Bets

In other Microsoft news, EVP Takeshi Numoto sold 2,850 shares of Microsoft stock in a transaction dated Thursday, December 4th. The shares were sold at an average price of $478.72, for a total value of $1,364,352.00. Following the completion of the sale, the executive vice president owned 55,782 shares in the company, valued at $26,703,959.04. The trade was a 4.86% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Judson Althoff sold 12,750 shares of the firm’s stock in a transaction that occurred on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the transaction, the chief executive officer directly owned 129,349 shares in the company, valued at $63,577,620.48. This represents a 8.97% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 54,100 shares of company stock worth $27,598,872 in the last quarter. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

Several large investors have recently modified their holdings of the business. Norges Bank acquired a new position in shares of Microsoft in the second quarter worth approximately $50,493,678,000. Nuveen LLC bought a new position in Microsoft during the 1st quarter worth approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings 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 purchasing an additional 49,618,571 shares during the last quarter. Laurel Wealth Advisors LLC lifted its position in shares of Microsoft by 49,640.3% in the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock worth $14,905,904,000 after purchasing an additional 29,906,791 shares during the period. Finally, Vanguard Group Inc. boosted its stake in shares of Microsoft by 2.3% in the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock valued at $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. 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).