Microsoft Stock Is Trading in a Range - Shorting Out-of-the-Money Puts Works

Core Viewpoint - Microsoft Corp. (MSFT) stock has been trading within a range, and shorting out-of-the-money (OTM) put options has been a profitable strategy, currently offering a 1.5% income yield for a one-month 4% OTM put option [1]. Group 1: Stock Performance - As of January 9, 2026, MSFT is trading at $475.35, down from $492.02 one month ago and $496.82 two months ago [1]. - A month prior, on December 9, 2025, MSFT was at $491.00, with a recommended short on the $475.00 put option [2]. Group 2: Options Strategy - Investors received $5.63 per contract for the $475.00 put option, translating to a one-month income yield of 1.185% based on an investment of $47,500 [3]. - The current $455.00 strike price put contract for February 6, 2026, has a midpoint premium of $7.60, offering an immediate yield of 1.67% [6]. Group 3: Price Targets and Analyst Sentiment - MSFT stock could potentially reach $682.55 per share over the next 12 months, supported by strong FY 26 Q1 results and a 33% free cash flow (FCF) margin [4]. - Analysts have raised their revenue forecasts, with 57 analysts increasing their price targets to $622.51, slightly down from $626.71 two months ago [5]. - Barchart's mean price target is $630.07, compared to $632.77 two months prior, indicating that analysts still view MSFT as undervalued [5].