Microsoft (NASDAQ:MSFT) Trading Down 2.3% After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT) shares fell 2.3% during mid-day trading on Wednesday after Rothschild & Co Redburn lowered their price target on the stock from $500.00 to $450.00. Rothschild & Co Redburn currently has a neutral rating on the stock. Microsoft traded as low as $438.68 and last traded at $444.11. 37,537,764 shares traded hands during trading, an increase of 45% from the average session volume of 25,956,799 shares. The stock had previously closed at $454.52.

Other analysts also recently issued reports about the stock. Melius Research increased their price target on shares of Microsoft from $595.00 to $625.00 in a research report on Thursday, September 25th. KeyCorp reaffirmed an “overweight” rating on shares of Microsoft in a research report on Thursday, October 30th. Citigroup decreased their price target on shares of Microsoft from $690.00 to $660.00 and set a “buy” rating for the company in a research note on Wednesday. Redburn Partners set a $560.00 price objective on Microsoft in a report on Wednesday, October 22nd. Finally, Mizuho lowered their price target on Microsoft from $640.00 to $620.00 and set an “outperform” rating on the stock in a research report on Wednesday. Three analysts have rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat.com, Microsoft has an average rating of “Buy” and a consensus price target of $624.08.

Insider Activity

In related news, CEO Judson Althoff sold 12,750 shares of the stock in a transaction that occurred on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the sale, the chief executive officer owned 129,349 shares of the company’s stock, valued at $63,577,620.48. This represents a 8.97% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, EVP Takeshi Numoto sold 2,850 shares of the stock in a transaction on Thursday, December 4th. The stock was sold at an average price of $478.72, for a total value of $1,364,352.00. Following the sale, the executive vice president directly owned 55,782 shares in the company, valued at approximately $26,703,959.04. This trade represents a 4.86% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 54,100 shares of company stock worth $27,598,872. Corporate insiders own 0.03% of the company’s stock.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Enterprise AI partnerships and product wins bolster long?term revenue potential — Microsoft is extending Foundry/agent capabilities into enterprise planning and announced collaborations across healthcare and ISVs that could drive Azure/Fabric adoption. Board Collaborates with Microsoft to Bring Agentic AI Into the Core of Enterprise Planning
• Positive Sentiment: Healthcare and industry deals (e.g., Bristol Myers) showcase commercial traction for Microsoft’s AI stack — these deals support Azure/Fabric monetization and non?advertising revenue diversification. Bristol Myers partners with Microsoft for AI-driven lung cancer detection
• Positive Sentiment: Macro AI narrative remains supportive — Davos discussions and OpenAI messaging keep investor focus on AI adoption and long?term TAM for hyperscalers like Microsoft. Davos focuses on AI revolution as tariffs and geopolitics linger, Wedbush says
• Neutral Sentiment: Wall Street still largely constructive — many analysts keep Buy ratings and high long?term targets (Goldman, Citigroup, TD Cowen maintain positive theses even after trimming targets), which supports medium/long?term positioning. Microsoft: Maintaining a Buy Rating as AI and Cloud Growth Offset Structurally Higher Power Costs
• Neutral Sentiment: AI infrastructure debate continues — industry leaders warn trillions of dollars and grid upgrades are needed; that supports long?term demand but flags execution and capital intensity risks. Top 5 AI Infrastructure Stocks as Jensen Huang Says ‘Trillions More Needed’
• Negative Sentiment: CEO warnings about an AI “bubble” and public comments on adoption limits dent sentiment — Satya Nadella’s caution that AI must spread beyond Big Tech to avoid a bubble has pressured the stock and heightened uncertainty about near?term multiples. Microsoft CEO warns AI needs to spread beyond Big Tech to avoid bubble
• Negative Sentiment: Analyst price?target trims and guidance concerns are weighing — several firms trimmed targets (Rothschild/Redburn, TD Cowen) and headlines highlighting Azure growth/guidance shortfalls are pressuring sentiment ahead of earnings. Rothschild & Co Redburn adjusts price target on Microsoft to 450 from 500; maintains neutral rating
• Negative Sentiment: Rising data?center energy costs and higher AI capex hurt near?term margins — investors are pricing in higher operating costs and heavy infrastructure spending that could temper short?term earnings growth. Energy costs will decide which countries win the AI race, Microsoft’s Nadella says
• Negative Sentiment: Market?wide tech weakness and geopolitical headlines add pressure — broader Magnificent Seven pullbacks and geopolitics are amplifying MSFT moves ahead of earnings. America’s Biggest Tech Stocks Lead Tuesday’s Selloff as Trump’s Greenland Rhetoric Rattles Markets

Institutional Trading of Microsoft

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Longfellow Investment Management Co. LLC grew its stake in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after purchasing an additional 20 shares during the last quarter. Westend Capital Management LLC lifted its holdings in Microsoft by 386.7% during the 2nd quarter. Westend Capital Management LLC now owns 73 shares of the software giant’s stock worth $36,000 after buying an additional 58 shares during the period. Bayforest Capital Ltd bought a new stake in shares of Microsoft in the 3rd quarter valued at about $38,000. Sellwood Investment Partners LLC acquired a new position in shares of Microsoft in the third quarter worth approximately $49,000. Finally, University of Illinois Foundation bought a new stake in Microsoft in the second quarter valued at approximately $50,000. Institutional investors own 71.13% of the company’s stock.

Microsoft Price Performance

The company has a current ratio of 1.40, a quick ratio of 1.39 and a debt-to-equity ratio of 0.10. The business’s 50-day simple moving average is $481.96 and its two-hundred day simple moving average is $502.15. The firm has a market cap of $3.30 trillion, a price-to-earnings ratio of 31.59, a P/E/G ratio of 1.72 and a beta of 1.07.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings data on Wednesday, October 29th. The software giant reported $4.13 earnings per share for the quarter, topping the consensus estimate of $3.65 by $0.48. The company had revenue of $77.67 billion during the quarter, compared to analysts’ expectations of $75.49 billion. Microsoft had a net margin of 35.71% and a return on equity of 32.45%. Microsoft’s revenue for the quarter was up 18.4% compared to the same quarter last year. During the same period in the prior year, the company posted $3.30 earnings per share. As a group, research analysts expect that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, March 12th. Investors 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 annualized dividend and a dividend yield of 0.8%. Microsoft’s dividend payout ratio is presently 25.89%.

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).