Microsoft (NASDAQ:MSFT) Shares Down 1.5% – Here’s What Happened

Microsoft Corporation (NASDAQ:MSFT)’s share price fell 1.5% during trading on Tuesday . The company traded as low as $390.69 and last traded at $393.83. 30,454,649 shares traded hands during mid-day trading, a decline of 15% from the average session volume of 35,727,098 shares. The stock had previously closed at $399.76.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Some commentary argues Microsoft’s AI and cloud businesses still look undervalued, with analysts and investors pointing to the company’s long-term earnings power and a potentially attractive valuation reset. Article Title
• Positive Sentiment: Microsoft continues to push new AI and developer tools, including a new coding model, which could strengthen its competitive position in enterprise AI over time. Article Title
• Neutral Sentiment: Microsoft also unveiled new Surface devices and expanded marketplace offerings, but these product updates appear less likely to move the stock than the company’s AI and cloud narrative. Article Title
• Negative Sentiment: Multiple law firms announced class action or securities fraud investigations tied to Microsoft’s disclosures around Azure growth, AI spending, and alleged investor harm, increasing legal overhang on the shares. Article Title
• Negative Sentiment: Reports that Microsoft may restructure or spin off parts of Xbox, including possible studio closures, added to concerns about profitability and execution within the gaming division. Article Title
• Negative Sentiment: Investor commentary has also focused on heavy AI capital expenditures and softer Azure growth, reinforcing the market’s concern that spending is rising faster than near-term returns. Article Title

Analyst Upgrades and Downgrades

A number of research firms have recently commented on MSFT. BNP Paribas Exane cut their price objective on Microsoft from $556.00 to $555.00 and set an “outperform” rating for the company in a research report on Friday, May 1st. Scotiabank dropped their price target on Microsoft from $600.00 to $550.00 and set an “outperform” rating for the company in a research report on Thursday, April 30th. Mizuho dropped their price target on Microsoft from $620.00 to $515.00 and set an “outperform” rating for the company in a research report on Tuesday, April 14th. Jefferies Financial Group reiterated a “buy” rating on shares of Microsoft in a research report on Monday, May 4th. Finally, Truist Financial dropped their price target on Microsoft from $675.00 to $575.00 and set a “buy” rating for the company in a research report on Thursday, April 30th. Forty-one equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average target price of $561.20.

Microsoft Price Performance

The stock has a 50 day simple moving average of $411.60 and a two-hundred day simple moving average of $428.09. The company has a market cap of $2.92 trillion, a price-to-earnings ratio of 23.43, a price-to-earnings-growth ratio of 1.41 and a beta of 1.11. The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping analysts’ consensus estimates of $4.06 by $0.21. The company had revenue of $82.89 billion for the quarter, compared to analyst estimates of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The firm’s revenue for the quarter was up 18.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $3.46 earnings per share. On average, equities research analysts predict that Microsoft Corporation will post 16.76 earnings per share for the current fiscal year.

Microsoft Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is 21.67%.

Insider Activity

In other news, EVP Amy Coleman sold 1,262 shares of the company’s stock in a transaction on Thursday, May 14th. The stock was sold at an average price of $411.34, for a total value of $519,111.08. Following the transaction, the executive vice president owned 46,003 shares of the company’s stock, valued at $18,922,874.02. This represents a 2.67% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the transaction, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 23,762 shares of company stock valued at $10,508,361 in the last quarter. Insiders own 0.03% of the company’s stock.

Hedge Funds Weigh In On Microsoft

Institutional investors have recently bought and sold shares of the company. Norges Bank acquired a new stake in Microsoft in the 4th quarter valued at about $50,664,631,000. Auto Owners Insurance Co grew its stake in Microsoft by 56,160.8% during the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock worth $29,073,486,000 after buying an additional 60,009,531 shares during the last quarter. Nuveen LLC purchased a new position in Microsoft during the 1st quarter worth approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in Microsoft by 500.0% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after buying an additional 49,618,571 shares during the last quarter. Finally, Laurel Wealth Advisors LLC grew its stake in Microsoft by 49,640.3% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock worth $14,905,904,000 after buying an additional 29,906,791 shares during the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft Company Profile

Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.

Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).