Microsoft (MSFT) Stock: Why President Just Unloaded $20 Million in Shares

TLDR

• Microsoft President Brad Smith sold 38,500 shares worth $19.97 million on November 3 as stock declined 5% post-earnings.
• Smith retains 461,596 shares valued at over $237 million after the transactions.
• Microsoft’s Q1 earnings beat estimates with $4.13 EPS and $77.67 billion revenue, but AI spending concerns dragged shares lower.
• Capital expenditures hit $34.9 billion in the quarter, exceeding analyst expectations.
• The company raised its quarterly dividend to $0.91 per share, payable December 11.

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Microsoft Vice Chair and President Brad Smith sold 38,500 shares on November 3. The two transactions totaled approximately $19.97 million.

The first sale involved 30,411 shares at $518.49 each. The second transaction covered 8,089 shares at $519.21 apiece.

Microsoft Corporation, MSFT

Following these sales, Smith directly owns 461,596 shares. At Tuesday’s closing price of $514.33, his remaining position is worth over $237 million.

The stock has dropped 5% since Microsoft released its latest earnings report. Shares remain up 21% year-to-date despite the recent pullback.

Strong Earnings Overshadowed by AI Investment Concerns

Microsoft posted fiscal first-quarter earnings that exceeded Wall Street expectations. The company reported $4.13 earnings per share, beating estimates of $3.65.

Revenue reached $77.67 billion, surpassing the $75.49 billion consensus. That represents an 18.4% increase year-over-year.

The company achieved a 33.47% return on equity and maintained a 35.71% net margin. Microsoft’s strong fundamentals didn’t prevent the post-earnings slide.

Investor concerns center on the company’s AI spending levels. Capital expenditures reached $34.9 billion in the quarter, exceeding expectations.

The broader market has grown wary of hyperscaler spending on AI infrastructure. Questions are mounting about whether these investments will generate adequate returns.

The Nasdaq Composite fell 2% on Tuesday, its worst single-day performance in nearly a month. Market sentiment has shifted as AI spending continues to accelerate.

Dividend Increase and Analyst Outlook

Microsoft announced a dividend increase to $0.91 per share. The payment will be made on December 11 to shareholders of record on November 20.

This represents an increase from the previous quarterly dividend of $0.83. The annualized dividend now stands at $3.64, yielding 0.7%.

Analysts remain optimistic about Microsoft’s prospects. The stock holds an average “Buy” rating across 39 analysts.

Sanford C. Bernstein raised its price target from $637 to $645. Wolfe Research set a $675 price objective on the shares.

The average analyst price target sits at $634.59. That represents potential upside from current levels.

Microsoft maintains a $3.77 trillion market capitalization. The stock trades at a P/E ratio of 36.07 with a debt-to-equity ratio of 0.12.

The company announced a $15.2 billion investment in the United Arab Emirates on November 3. The initiative aims to expand Microsoft’s presence in the region through 2029.

Smith’s stock sales come during a period of uncertainty around AI investments. The transactions represent a 7.7% reduction in his direct ownership position.

Trading volume increased 5% above average on Wednesday. The stock traded as low as $506.58 during the session.

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