Activist investor Dan Loeb's Third Point LLC boosted its stake in Microsoft Corporation (NASDAQ:MSFT) by 175% in the third quarter of 2025.
Details:
According to recent 13F filings, reflecting his holdings as of Sept. 30, Third Point raised its stake to 1.1 million shares from 400,000 in the second quarter of 2025.
This compares to 315,000 shares in the first quarter of 2025, 600,000 shares in the fourth quarter of 2024, and 870,000 shares in the third quarter of 2024.
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Recent Key Events
In October, Microsoft reported first-quarter FY26 revenue of $77.7 billion, up 18% year-over-year, which beat the consensus estimate of $75.3 billion and EPS of $4.13, exceeding the Street's estimate of $3.67.
For the second quarter of fiscal 2026, Microsoft expects revenue of $79.5 billion-$80.6 billion, reflecting 14% to 16% growth.
The company also anticipates ongoing commercial cloud gross margin pressure, elevated capital expenditures, and capacity constraints continuing through the end of the fiscal year.
In November, the U.S. reportedly approved Microsoft to ship the U.S. chip designer's artificial intelligence chips for use in the United Arab Emirates (UAE).
Microsoft plans to invest $15.2 billion in the UAE from 2023 to 2029, including $1.5 billion in G42 equity and over $10 billion for AI and cloud data centers.
Analyst View
Analyst responses are mostly positive. Maintaining an Overweight rating, Morgan Stanley analyst Keith Weiss increased the forecast to $650 from $625, and Wells Fargo analyst Michael Turrin boosted the estimates to $700 from $675.
Wedbush analyst Dan Ives says the next stop for Microsoft could be joining Nvidia in the $5 trillion market capitalization club and adds that “it remains clear that FY26 remains the true inflection year of AI growth for Microsoft.”
However, Rothschild & Co. analyst Alex Haissl downgraded the rating from Buy to Neutral and lowered the forecast from $560 to $500.
Haissl says that the argument for generative AI is no longer convincing, and hyperscalers need to be used carefully.
The analyst added that the underlying economics are "far weaker than assumed," making the industry's "trust us — Gen-AI is just like early cloud 1.0" story seem to be getting further and further off.
Stock Comparison
Year-to-date, Microsoft rose 13.2%, underperforming the iShares U.S. Technology ETF (NYSE:IYW), which gained about 22.20%.
Also, the company significantly lagged compared to its closest peers, Oracle Corporation (NYSE:ORCL), which rose roughly 22.1% year-to-date.
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