Microsoft (NASDAQ:MSFT) Trading Down 2.4% – Here’s What Happened

Shares of Microsoft Corporation (NASDAQ:MSFT) fell 2.4% during mid-day trading on Wednesday . The stock traded as low as $364.78 and last traded at $365.1210. 43,811,866 shares changed hands during mid-day trading, an increase of 21% from the average session volume of 36,244,023 shares. The stock had previously closed at $373.94.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s new 20-year power agreement with Chevron for a Texas AI data center is being viewed as a strategic move to secure the electricity needed for future Azure and AI growth, reinforcing the company’s long-term infrastructure buildout. Article Title
• Positive Sentiment: Several commentary pieces argue Microsoft is being unfairly punished for AI capex and that the company is actually building a wider moat, with bullish notes pointing to a substantial AI revenue run rate and potential upside if spending converts into growth. Article Title
• Positive Sentiment: Microsoft’s education-focused AI report and related product announcements suggest continued enterprise and institutional adoption of its AI tools, supporting the long-term monetization story. Article Title
• Neutral Sentiment: Analyst commentary from Stifel reiterated a Hold rating, saying the Chevron deal highlights power demand for AI data centers but does not materially change the near-term investment case. Article Title
• Negative Sentiment: Microsoft is facing multiple securities class-action alerts tied to alleged investor harm, adding legal uncertainty and sentiment pressure on the shares. Article Title
• Negative Sentiment: A new critique in Nature and Reuters coverage questioned Microsoft’s quantum-computing breakthrough, increasing doubts about a key technology narrative and weighing on investor confidence. Article Title
• Negative Sentiment: More broadly, investors remain worried that Microsoft’s heavy AI/data-center spending is pressuring free cash flow, which has fueled recent volatility in the stock. Article Title

Analysts Set New Price Targets

Several equities research analysts have commented on the company. Scotiabank lowered their price objective on Microsoft from $600.00 to $550.00 and set an “outperform” rating on the stock in a research report on Thursday, April 30th. Mizuho decreased their target price on shares of Microsoft from $620.00 to $515.00 and set an “outperform” rating for the company in a research note on Tuesday, April 14th. BNP Paribas Exane lowered their price target on shares of Microsoft from $556.00 to $555.00 and set an “outperform” rating on the stock in a report on Friday, May 1st. The Goldman Sachs Group reiterated a “buy” rating on shares of Microsoft in a research report on Thursday, April 30th. Finally, TD Cowen reissued a “buy” rating and set a $540.00 target price on shares of Microsoft in a research note on Thursday, June 4th. Forty-one equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $561.20.

Microsoft Stock Down 2.4%

The stock has a market cap of $2.71 trillion, a price-to-earnings ratio of 21.73, a PEG ratio of 1.32 and a beta of 1.11. The business’s 50 day moving average is $412.32 and its 200-day moving average is $423.55. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28.

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

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be paid a $0.91 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a yield of 1.0%. Microsoft’s dividend payout ratio (DPR) is currently 21.67%.

Insider Buying and Selling

In other news, EVP Takeshi Numoto sold 4,500 shares of the firm’s stock in a transaction that occurred on Wednesday, June 10th. The stock was sold at an average price of $402.84, for a total value of $1,812,780.00. Following the transaction, the executive vice president owned 47,468 shares in the company, valued at $19,122,009.12. This trade represents a 8.66% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the sale, the chief executive officer directly owned 110,477 shares in the company, valued at $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 23,762 shares of company stock worth $10,508,361. Insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in MSFT. Longfellow Investment Management Co. LLC raised its position in shares of Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares during the period. Bernzott Capital Advisors purchased a new position in Microsoft in the fourth quarter worth approximately $34,000. Timmons Wealth Management LLC purchased a new position in Microsoft in the fourth quarter worth approximately $36,000. Fairway Wealth LLC increased its stake in Microsoft by 287.0% during the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after acquiring an additional 66 shares during the last quarter. Finally, LSV Asset Management acquired a new stake in Microsoft during the fourth quarter worth $44,000. Hedge funds and other institutional investors own 71.13% of the company’s stock.

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).