Microsoft Corp. (Microsoft (MSFT)) shares ticked higher on Tuesday as investors cheered a legal victory that removes a major overhang tied to OpenAI. A jury in Oakland, California, ruled against Elon Musk on Monday after a three-week trial stemming from his 2024 lawsuit alleging that Sam Altman and OpenAI violated an agreement to remain a nonprofit.
The claims against Microsoft were dismissed, and the ruling also undercuts a worst-case scenario that included a $134 billion clawback effort aimed at OpenAI and Microsoft. That's a big deal — the kind of existential legal risk that keeps institutional investors up at night. With that cloud lifted, the stock got a modest bump.
But that's not the only thing moving the stock. Microsoft is also in the spotlight thanks to some high-profile portfolio moves from President Donald Trump and hedge fund manager Bill Ackman, each with very different implications.
Trump's Trades Raise Eyebrows
President Donald Trump's latest financial disclosures showed a flurry of activity involving Microsoft and several other major U.S. companies during the first quarter. The filings revealed that Trump sold Microsoft holdings worth between $5 million and $25 million on February 10, alongside positions in Meta Platforms Inc. (META) and Amazon.com Inc. (AMZN), according to Bloomberg.
The disclosures revealed that he or his investment advisers executed more than 3,700 trades in the first quarter of 2026, involving tens of millions of dollars and shares of major companies such as Nvidia, Microsoft, Amazon, Boeing Company (BA), and Costco Wholesale Corp. (COST). The unusually high trading activity has raised fresh conflict-of-interest concerns among Wall Street experts, particularly because several of the companies have business ties to the U.S. government and are affected by Trump administration policies.
It's worth noting that Trump's trades are a mix of buys and sells — he's not just dumping Microsoft. But the sheer volume of activity is unusual for a sitting president, and it's adding a layer of noise to the stock's narrative.
Ackman Goes All In on Microsoft
On the other side of the spectrum, Bill Ackman's Pershing Square disclosed a $2.1 billion stake in Microsoft, with the hedge fund manager calling the software giant more resilient than investors currently appreciate. Ackman said Microsoft's 365 software suite and Azure cloud platform remain among the strongest franchises in enterprise technology, according to Bloomberg.
He argued that investor concerns surrounding Copilot adoption and cloud demand have created an attractive entry point following the stock's recent decline. He also described Microsoft's revised OpenAI partnership as a strategic move toward a broader multi-model AI ecosystem rather than a concession to OpenAI.
Ackman funded part of the Microsoft investment by reducing Pershing Square's Alphabet Inc. (GOOGL) position, while emphasizing that he remains bullish on Google long term. It's a classic Ackman move — concentrate your bets where you see the most upside, but don't burn bridges.
Earnings & Analyst Outlook
Looking further out, the next major catalyst for the stock arrives with the July 2026 (estimated) earnings report. Here's what the Street is expecting:
- EPS Estimate: $4.24 (Up from $3.65 YoY)
- Revenue Estimate: $87.61 Billion (Up from $76.44 Billion YoY)
- Valuation: P/E of 25.2x (Indicates premium valuation relative to peers)
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $559.38. Recent analyst moves include:
- Wedbush: Outperform (Maintains forecast to $575.00) (May 13)
- Tigress Financial: Buy (Raises forecast to $680.00) (May 6)
- Stifel: Hold (Raises forecast to $415.00) (May 1)
The wide range of price targets — from $415 to $680 — shows just how divided analysts are on Microsoft's near-term prospects. But the consensus remains bullish, and the legal win only strengthens the case.
Price Action
MSFT Price Action: Microsoft shares were up 1.27% at $428.90 at the time of publication on Tuesday.
