TLDR
- Microsoft stock was up 0.35% on Wednesday, still down 14.64% year-to-date
- Xbox CEO Asha Sharma announced the end of Copilot development for consoles and wind-down on mobile
- Microsoft beat Q3 earnings with EPS of $4.27 vs. $4.06 estimated; revenue up 18.3% YoY to $82.89 billion
- Wall Street consensus is Strong Buy with an average price target of $562.44
- KBC Group NV increased its MSFT position by 2.9%, with institutional ownership at 71.13%
Microsoft (MSFT) stock edged up 0.35% on Wednesday after Xbox CEO Asha Sharma confirmed the company is ending development of its Copilot AI assistant for consoles and winding it down on mobile. The stock opened at $414.10 on Thursday.
The move comes as Xbox looks to refocus. Sharma said the division needs to “move faster, deepen our connection with the community, and address friction for both players and developers.”
Investors appeared to take the news as a positive — dropping a costly project and pointing resources elsewhere.
Sharma also announced leadership changes within Xbox, promoting existing leaders while bringing in new voices to help the division find its footing.
Xbox has been under pressure for years. Gamers have been drifting away from the platform, and Microsoft has even started releasing first-party titles on Sony’s PlayStation — a sign of how much the dynamics have shifted.
Hardware sales for the Xbox Series X|S have remained weak. Sharma’s comments were the most direct acknowledgment yet that a reset is underway.
Strong Earnings Provide Backdrop
Despite the Xbox struggles, Microsoft delivered a solid quarter. The company reported EPS of $4.27 for Q3, beating the $4.06 consensus estimate by $0.21.
Revenue came in at $82.89 billion, up 18.3% year-over-year and ahead of the $81.44 billion analyst estimate. AI and cloud demand drove much of that growth.
Microsoft also declared a quarterly dividend of $0.91 per share, payable June 11th to shareholders on record by May 21st. That works out to an annualized yield of roughly 0.9%.
The strong quarter hasn’t fully lifted the stock, though. MSFT is still down 14.64% year-to-date and off 5.07% over the past 12 months. Trading volume on Wednesday was around 17 million — about half the three-month daily average.
Institutional Buying Continues
On the institutional side, KBC Group NV raised its Microsoft position by 2.9% in Q4, adding 156,016 shares to bring its total to 5,625,098. The holding is worth approximately $2.72 billion and represents about 6.2% of KBC’s portfolio.
Other large players have also been adding. Norges Bank, Nuveen, UBS Asset Management, and Northern Trust all increased their positions in recent quarters. Institutional investors collectively own 71.13% of MSFT.
Analyst sentiment remains broadly positive. Deutsche Bank holds a buy rating with a $550 price target. Oppenheimer rates it outperform at $515. Rothschild & Co Redburn is the outlier with a neutral rating and a $400 target.
The current Wall Street consensus sits at Moderate Buy with an average price target of $562.44 — implying meaningful upside from current levels.
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