US Markets
Home›US Markets›Options›Microsoft investors consider shorting out-of-the-money…
Microsoft investors consider shorting out-of-the-money MSFT puts
MSFT closed at $495.40 on Aug. 14, and the outlook cited includes projected FY27 revenue of $391.17 billion and ongoing capex of $175 billion.
An analysis highlighted how some investors in Microsoft Corp. are using short-term out-of-the-money put options to seek income and a lower entry price in the stock. The piece points to Microsoft shares closing just below $500, at $495.40 on Friday, Aug. 14.
The article links the options strategy to a bullish view of Microsoft’s cash flow after its July 29 FY26 earnings release, saying strong free cash flow could persist despite heavy capital expenditures. It adds that analysts have increased revenue forecasts and raised their MSFT price targets.
The analysis cites revenue estimates of $391.17 billion for the year ending June 30, 2027, and $468.37 billion by June 2028, which it says are above FY26 revenue of $331.8 billion. It also projects ongoing capex of $175 billion and uses a prior quarter operating cash flow margin, saying Q4 operating cash flow was 61.6% of revenue.
Using those assumptions, the article estimates free cash flow could rise to about $69 billion in the coming period, and argues that capex is expected to increase versus $116 billion spent last fiscal year. It also notes an average price target of $567.20, despite the stock’s recent advance.