Microsoft Sees Unusually Large Options Volume (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) was the recipient of some unusual options trading activity on Friday. Traders acquired 586,432 call options on the company. This represents an increase of 56% compared to the typical daily volume of 376,264 call options.

Microsoft Stock Performance

Shares of MSFT traded down $2.61 during midday trading on Friday, hitting $430.90. 35,016,731 shares of the stock traded hands, compared to its average volume of 32,945,922. The business’s 50 day moving average price is $476.67 and its two-hundred day moving average price is $500.21. The firm has a market capitalization of $3.20 trillion, a PE ratio of 26.96, a price-to-earnings-growth ratio of 1.94 and a beta of 1.07. The company has a debt-to-equity ratio of 0.10, a quick ratio of 1.39 and a current ratio of 1.40. Microsoft has a 1-year low of $344.79 and a 1-year high of $555.45.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 earnings per share for the quarter, beating analysts’ consensus estimates of $3.86 by $0.28. The business had revenue of $81.27 billion for the quarter, compared to analysts’ expectations of $80.28 billion. Microsoft had a net margin of 39.04% and a return on equity of 33.48%. The company’s revenue was up 16.7% on a year-over-year basis. During the same period in the previous year, the business earned $3.23 earnings per share. Equities research analysts predict that Microsoft will post 13.08 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be paid a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date is Thursday, February 19th. Microsoft’s dividend payout ratio (DPR) is currently 25.89%.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q2 beat — Microsoft reported stronger-than-expected revenue and EPS, confirming Azure growth and Microsoft Cloud momentum that underpins the long-term AI/cloud thesis. Microsoft beats Wall Street expectations with $81.3B revenue
• Positive Sentiment: Big commercial backlog — Microsoft’s contracted backlog/remaining performance obligations surged (reported ~ $625B), driven by OpenAI and large AI customers, signalling multi-year revenue visibility. Microsoft demand backlog doubles to $625 billion
• Positive Sentiment: Large commercial deals — Perplexity signed a reported $750M, three‑year Azure deal; these wins help monetize Azure/Foundry and validate cloud demand for AI workloads. Perplexity Adds Microsoft’s Azure as a Cloud Service Provider
• Neutral Sentiment: Product & chip strategy — Microsoft launched its Maia 200 AI accelerator and says it will still buy chips from Nvidia/AMD; this reduces vendor risk but adds near-term complexity to cost/provisioning. As Microsoft Launches Its New Maia 200 AI Accelerator
• Neutral Sentiment: Analyst stance mixed but largely constructive — several firms trimmed targets but maintained buy/overweight ratings; a few raised targets. That keeps institutional support but increases short‑term volatility. New Street Research adjusts Microsoft price target
• Negative Sentiment: Record capex and margin concerns — Q2 capex (~$37.5B) and guidance signalled a step-up in AI infrastructure spend; markets fear a slow payback period and margin pressure. Microsoft says OpenAI is driving 45% of the backlog for Azure cloud computing
• Negative Sentiment: Market reaction — investors punished the miss on Azure upside and heavy AI spending, triggering a large one‑day selloff that erased hundreds of billions in market cap and fed broader tech weakness. Microsoft tumbled 10% in a day and isn’t recovering premarket
• Negative Sentiment: Legal/investor scrutiny — law‑firm investigations and class‑action filings have appeared, adding headline risk during the volatile post‑earnings period. Microsoft Corporation Investigated on Behalf of Investors

Analyst Upgrades and Downgrades

Several equities analysts have recently weighed in on the company. Evercore ISI reduced their price objective on Microsoft from $640.00 to $580.00 and set an “outperform” rating on the stock in a research note on Thursday. Rothschild Redb downgraded shares of Microsoft from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, November 18th. The Goldman Sachs Group cut their target price on shares of Microsoft from $655.00 to $600.00 and set a “buy” rating on the stock in a research note on Thursday. Stifel Nicolaus set a $540.00 price target on shares of Microsoft in a research report on Thursday. Finally, HSBC cut their price objective on Microsoft from $667.00 to $588.00 and set a “buy” rating on the stock in a research report on Thursday. One investment 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. Based on data from MarketBeat.com, Microsoft presently has an average rating of “Moderate Buy” and a consensus target price of $597.73.

Insiders Place Their Bets

In other news, EVP Takeshi Numoto sold 2,850 shares of the firm’s stock in a transaction that occurred on Thursday, December 4th. The shares were sold at an average price of $478.72, for a total transaction of $1,364,352.00. Following the completion of the transaction, the executive vice president directly owned 55,782 shares of the company’s stock, valued at $26,703,959.04. This trade represents a 4.86% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Judson Althoff sold 12,750 shares of the business’s stock in a transaction dated Tuesday, December 2nd. The shares were sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the completion of the transaction, the chief executive officer directly owned 129,349 shares of the company’s stock, valued at $63,577,620.48. The trade was a 8.97% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have sold 54,100 shares of company stock worth $27,598,872. Company insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Norges Bank acquired a new stake in Microsoft during the second quarter valued at approximately $50,493,678,000. Nuveen LLC bought a new position in shares of Microsoft during the 1st quarter worth approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its position in shares of 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 buying an additional 49,618,571 shares during the period. Laurel Wealth Advisors LLC grew its position in 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 acquiring an additional 29,906,791 shares during the period. Finally, Vanguard Group Inc. grew its position in Microsoft by 2.3% in the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock valued at $347,211,391,000 after acquiring an additional 15,955,898 shares during the period. 71.13% of the stock is currently owned by institutional investors.

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).