Microsoft (NASDAQ:MSFT) Trading Down 2.9% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) fell 2.9% on Tuesday . The company traded as low as $408.56 and last traded at $411.21. 60,012,994 shares changed hands during mid-day trading, an increase of 68% from the average session volume of 35,706,152 shares. The stock had previously closed at $423.37.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: MSFT highlighted a new Maia AI chip and broader AI/cloud product updates, reinforcing Microsoft’s push to vertically integrate hardware and cloud AI capabilities — a long‑term positive for Azure and enterprise AI positioning. Microsoft Highlights Maia Chip Launch
• Positive Sentiment: Phillip Securities upgraded MSFT from “moderate buy” to “strong buy,” signaling at least some analyst conviction that the pullback presents a buying opportunity. Phillip Securities Upgrade
• Positive Sentiment: Analyst praise (Piper Sandler / TipRanks coverage) labels Microsoft a leading “pure‑play” on AI adoption — supportive for medium/long‑term investor sentiment even as the stock sells off short term. TipRanks: Best Pure-Play on AI Adoption
• Neutral Sentiment: MarketBeat’s “AI in a Box” piece signals a hardware refresh cycle (SanDisk earnings) that benefits OEMs (Dell, HP). This is an indirect tailwind for MSFT because edge AI growth increases demand for Windows/enterprise deployments, but it primarily lifts hardware vendors. The AI in a Box Trade
• Neutral Sentiment: Snowflake’s $200M OpenAI partnership underscores strong enterprise AI demand and data‑platform bets; it highlights opportunities and competitive dynamics in cloud AI that could influence Azure consumption, but its direct impact on MSFT is mixed. Snowflake’s $200M Bet
• Negative Sentiment: After earnings, headlines emphasized soaring capital expenditures (record AI capex) and cloud revenue growth cooling — investors interpret this as heavy near‑term spending with slower top‑line leverage, a primary reason for today’s sell‑off. MSFT Capital Expenditures Soar; Cloud Revenue Falls Short
• Negative Sentiment: Analysts have trimmed price targets and voiced caution after the quarterly results — some firms lowered targets or expressed concern about Azure deceleration and ROI on AI investments, which amplifies selling pressure. Analysts Cut MSFT Price Targets
• Negative Sentiment: Geopolitical/regulatory risk: reports of European governments (e.g., France) favoring homegrown collaboration platforms highlight potential revenue headwinds for Teams and other services in parts of Europe. France Ditches Zoom and Teams

Analysts Set New Price Targets

A number of equities research analysts have weighed in on the company. Evercore ISI decreased their price objective on Microsoft from $640.00 to $580.00 and set an “outperform” rating on the stock in a report on Thursday, January 29th. Guggenheim restated a “buy” rating and set a $586.00 target price on shares of Microsoft in a research report on Thursday, January 22nd. Citigroup decreased their price target on Microsoft from $660.00 to $635.00 and set a “buy” rating on the stock in a research note on Thursday, January 29th. Royal Bank Of Canada reiterated an “outperform” rating and set a $640.00 price objective on shares of Microsoft in a research note on Thursday, January 29th. Finally, Stifel Nicolaus set a $540.00 price objective on Microsoft in a report on Thursday, January 29th. Two analysts have rated the stock with a Strong Buy rating, forty have given a Buy rating and three have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $597.73.

Microsoft Trading Down 2.9%

The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.38 and a current ratio of 1.39. The firm has a market cap of $3.05 trillion, a price-to-earnings ratio of 25.72, a P/E/G ratio of 1.69 and a beta of 1.07. The company’s 50-day moving average is $474.82 and its 200-day moving average is $499.00.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Wednesday, January 28th. The software giant reported $4.14 earnings per share for the quarter, topping analysts’ consensus estimates of $3.86 by $0.28. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The company had revenue of $81.27 billion during the quarter, compared to the consensus estimate of $80.28 billion. During the same period in the previous year, the firm posted $3.23 earnings per share. The company’s revenue was up 16.7% on a year-over-year basis. On average, research analysts predict that Microsoft Corporation will post 13.08 earnings per share for the current year.

Microsoft Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, March 12th. Stockholders of record on Thursday, February 19th will be given a dividend of $0.91 per share. The ex-dividend date is Thursday, February 19th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. Microsoft’s payout ratio is presently 22.76%.

Insider Buying and Selling at Microsoft

In other Microsoft news, CEO Judson Althoff sold 12,750 shares of the company’s stock in a transaction dated Tuesday, December 2nd. The shares were sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the transaction, the chief executive officer directly owned 129,349 shares in the company, valued at approximately $63,577,620.48. This represents a 8.97% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, EVP Takeshi Numoto sold 2,850 shares of Microsoft stock in a transaction that occurred on Thursday, December 4th. The stock was sold at an average price of $478.72, for a total transaction of $1,364,352.00. Following the sale, the executive vice president owned 55,782 shares of the company’s stock, valued at approximately $26,703,959.04. This represents a 4.86% decrease in their position. The SEC filing for this sale provides additional information. Corporate insiders own 0.03% of the company’s stock.

Hedge Funds Weigh In On Microsoft

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Longfellow Investment Management Co. LLC boosted its stake in Microsoft by 51.3% during the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after acquiring an additional 20 shares during the last quarter. Bernzott Capital Advisors acquired a new stake in Microsoft in the fourth quarter worth $34,000. Bayforest Capital Ltd bought a new position in shares of Microsoft during the third quarter worth $38,000. Fairway Wealth LLC grew its holdings in shares of Microsoft by 287.0% in the 4th quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after buying an additional 66 shares during the period. Finally, LSV Asset Management bought a new stake in shares of Microsoft in the 4th quarter valued at $44,000. 71.13% of the stock is owned by institutional investors.

About Microsoft

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).