Microsoft (NASDAQ:MSFT) Shares Down 2.2% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) shares fell 2.2% during mid-day trading on Thursday . The company traded as low as $377.39 and last traded at $381.58. Approximately 30,199,237 shares changed hands during mid-day trading, a decline of 19% from the average daily volume of 37,203,578 shares. The stock had previously closed at $390.34.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft expanded its long-term partnership with Databricks, deepening Azure integrations and strengthening its cloud/AI ecosystem across Microsoft 365, Teams, and Copilot. Microsoft (MSFT) Expands Partnership with AI Firm Databricks
• Positive Sentiment: Analysts and bulls continue to argue that Microsoft remains undervalued after its pullback, with several notes pointing to healthy demand, strong Azure growth potential, and upside if AI monetization stays on track. Analysts Say Microsoft Stock is Deeply Undervalued Ahead of Q4 Earnings
• Positive Sentiment: Microsoft also announced additional AI-related initiatives, including support for the Department of Energy’s “Genesis Mission” and other marketplace and infrastructure partnerships, reinforcing its long-term AI platform strategy. Microsoft commits $60M to ‘Genesis Mission’ to help power Dept. of Energy’s AI-for-science push
• Neutral Sentiment: Microsoft is also making strategic moves in cloud gaming and security, but these stories appear more incremental than immediately stock-moving. Amazon and Microsoft pivot cloud gaming strategies to target different players
• Negative Sentiment: The biggest headwind remains investor concern that Microsoft’s massive AI capital expenditures could pressure margins and overshadow otherwise solid earnings, especially if management does not reassure the market on spending discipline. Microsoft Earnings Preview: Get Ready for Soaring AI Spending to Sink MSFT Stock
• Negative Sentiment: There is also ongoing legal overhang from class action and investor-alert headlines tied to alleged securities issues, which adds another source of sentiment drag. Investor Alert: Pomerantz Law Firm Reminds Investors… – MSFT

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on MSFT shares. Phillip Securities upgraded shares of Microsoft to a “buy” rating and set a $485.00 price objective for the company in a research report on Wednesday, May 13th. 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. Citizens Jmp initiated coverage on Microsoft in a report on Monday, June 1st. They issued an “outperform” rating and a $550.00 target price on the stock. Sanford C. Bernstein reaffirmed an “outperform” rating and set a $646.00 target price on shares of Microsoft in a research report on Wednesday. Finally, Barclays reaffirmed an “overweight” rating on shares of Microsoft in a report on Wednesday, June 3rd. Forty-three equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat.com, Microsoft currently has a consensus rating of “Moderate Buy” and a consensus target price of $556.37.

Microsoft Trading Down 2.2%

The company’s 50-day moving average is $399.57 and its 200 day moving average is $408.91. The company has a current ratio of 1.28, a quick ratio of 1.27 and a debt-to-equity ratio of 0.08. The firm has a market cap of $2.83 trillion, a PE ratio of 22.71, a P/E/G ratio of 1.22 and a beta of 1.13.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping the consensus estimate of $4.06 by $0.21. The firm had revenue of $82.89 billion for the quarter, compared to analysts’ expectations of $81.44 billion. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company’s quarterly revenue was up 18.3% compared to the same quarter last year. During the same period in the previous year, the company posted $3.46 EPS. As a group, sell-side analysts predict that Microsoft Corporation will post 16.71 EPS for the current year.

Microsoft Announces Dividend

The firm also recently disclosed 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. This represents a $3.64 annualized dividend and a yield of 1.0%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio is currently 21.67%.

Insiders Place Their Bets

In other Microsoft news, EVP Takeshi Numoto sold 4,500 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the completion of the sale, the executive vice president directly owned 47,468 shares in the company, valued at approximately $19,122,009.12. This trade represents a 8.66% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the company’s 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 owned 110,477 shares in the company, valued at $50,928,792.23. This represents a 12.30% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Microsoft

Several institutional investors and hedge funds have recently modified their holdings of MSFT. Capstone Wealth Management LLC increased its stake in shares of Microsoft by 62.3% in the second quarter. Capstone Wealth Management LLC now owns 4,120 shares of the software giant’s stock worth $1,537,000 after acquiring an additional 1,581 shares during the last quarter. Reston Wealth Management LLC boosted its position in Microsoft by 4.3% during the second quarter. Reston Wealth Management LLC now owns 5,870 shares of the software giant’s stock valued at $2,189,000 after purchasing an additional 241 shares during the last quarter. Symmetry Partners LLC boosted its position in Microsoft by 3.1% during the second quarter. Symmetry Partners LLC now owns 17,734 shares of the software giant’s stock valued at $6,615,000 after purchasing an additional 530 shares during the last quarter. RIA Advisory Group LLC grew its stake in Microsoft by 1.8% in the second quarter. RIA Advisory Group LLC now owns 18,842 shares of the software giant’s stock valued at $7,028,000 after purchasing an additional 340 shares in the last quarter. Finally, Sawyer & Company Inc increased its position in Microsoft by 14.8% in the 2nd quarter. Sawyer & Company Inc now owns 32,358 shares of the software giant’s stock worth $12,070,000 after purchasing an additional 4,178 shares during the last quarter. 71.13% of the stock is currently owned by hedge funds and other 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).