As the year draws to a close, Microsoft finds itself the subject of concentrated buying activity from major financial institutions. Recent regulatory filings reveal a trend of significant position building, led by a central European bank, coinciding with fresh data underscoring the company’s robust shareholder returns.
Central Bank and Fund Managers Boost Holdings
A standout move in the third quarter of 2025 came from the Czech National Bank, which expanded its Microsoft holding by 3.9%. The purchase of 71,091 shares brings its total stake to nearly 1.89 million shares, valued at approximately $978 million. This solidifies Microsoft as the second-largest position within the bank’s investment portfolio, highlighting strong institutional confidence in the firm’s long-term trajectory.
This sentiment was echoed by other major investors. Cooper Financial Group increased its position by 3.5%, while Acropolis Investment Management more than doubled its exposure with a rise exceeding 110%. The picture wasn’t uniformly bullish, however, as some profit-taking occurred. Chesley Taft & Associates, for instance, trimmed its holding by 2.5%, though Microsoft remains its largest single investment.
Insider trading activity over the past 90 days shows a net sale of 54,100 shares by executives, worth about $27.6 million. Overall, institutional investors control roughly 71% of Microsoft’s outstanding shares.
Shareholder Returns Exceed $42 Billion
Microsoft’s commitment to returning capital was demonstrated in fiscal year 2025, with a total of $42.5 billion delivered to shareholders. This comprised $24.08 billion in dividend payments and $18.42 billion allocated to share repurchases. The company has now raised its dividend for 16 consecutive years, with an average annual increase of 13.9% since 2010.
Should investors sell immediately? Or is it worth buying Microsoft?
The current dividend yield stands near 0.7%. An investor who purchased shares a decade ago would now be enjoying a yield on cost exceeding 6.5%. With a payout ratio of just 19.8% of operating cash flow, Microsoft retains substantial flexibility to fund ambitious growth initiatives, particularly in artificial intelligence.
Billions Fuel the AI Expansion Drive
The tech behemoth is channeling immense resources into artificial intelligence infrastructure. Capital expenditures reached $35 billion in the most recent quarter alone. Chief Financial Officer Amy Hood anticipates capacity constraints persisting until mid-2026. To secure vital components, a $9.7 billion deal with IREN was struck to guarantee access to Nvidia chips, complemented by a further $17.5 billion investment in cloud infrastructure in India.
Further expanding its AI ecosystem, Microsoft announced a multi-year partnership with Cognizant on December 18 to develop industry-specific AI solutions. The stock currently trades at a P/E ratio of 34.6, slightly above the industry average of 32.4. A discounted cash flow analysis suggests a fair value of around $602 per share, implying an upside potential of approximately 19%.
Upcoming Catalyst: January Earnings Report
The consensus price target among analysts is $631, with Citigroup issuing a “Strong Buy” recommendation. Market participants will next focus on Microsoft’s quarterly results, scheduled for release on January 28, 2026. Earnings per share are projected to be $3.86. Whether the recent institutional accumulation provides enough momentum to push the stock past the psychologically significant $500 mark before year-end will be revealed in the coming trading sessions.
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