It’s been an excellent week and month for Microsoft (NASDAQ:MSFT). The tech giant has risen more than 43% over the past two quarters. With the artificial intelligence (AI) boom continuing to dominate markets, this sector leader is well-positioned to keep rising. But one of its top executives recently opted to start offloading shares. According to a regulatory filing with the Securities and Exchange Commission (SEC), Executive Vice President & Chief Commercial Officer Judson Althoff recently sold off a chunk of his MSFT stock. However, he still holds a significant amount of it.
News of this trade hasn’t negatively impacted the company. That said, it is worth a closer look as Microsoft moves forward into what could be a highly profitable second quarter.
What’s Happening With MSFT Stock
Despite beginning the day by falling, MSFT stock is working hard to rally. As of this writing, it is up 0.30% for the day, and its current trajectory suggests that it can keep climbing. The stock has been rising steadily over the past five days, though it hasn’t reported any company-specific catalysts. This is likely due to general positive market momentum, but it’s clear that investor enthusiasm is high. As InvestorPlace contributor Muslim Farooque speculates, MSFT has arguably “benefited the most from the proliferation of AI this year.”
These recent gains could explain why Althoff sold part of his Microsoft holdings but still maintains 117,456.472 shares. The SEC Form 4 filing dated May 1 reveals that he recently sold 30,000 shares at $306.09 each, collecting a profit of over $9 million. Since he sold, MSFT stock has fallen slightly and currently trades at $305.82. This decline likely has little to do with Althoff’s decision to sell. But more importantly, investors shouldn’t regard the trade as an indication that Microsoft is in trouble. The company is well-positioned to keep riding the AI wave to new highs in 2023. Per InvestorPlace contributor Josh Enomoto:
“Financially, Microsoft easily ranks among the top generative AI companies. Primarily, the company delivers excellent operational stats. Its three-year revenue growth rate pings at 17.4%, outpacing 71.6% of firms listed in the software industry. Also, its free cash flow (FCF) growth rate during the same period is 20.5%, above 64.8% of its peers.”
Althoff is likely shifting some assets around but not losing faith in Microsoft. Recent data from Whale Wisdom indicates that institutional investment in the tech giant remains strong, with the number of new positions surging by almost 140%. MSFT stock will likely continue its upward trajectory in Q2.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
