Microsoft (NASDAQ:MSFT) Stock Price Down 2% – Here’s What Happened

Microsoft Corporation (NASDAQ:MSFT) shares fell 2% during trading on Friday . The stock traded as low as $499.36 and last traded at $499.70. 17,391,665 shares were traded during mid-day trading, a decline of 52% from the average daily volume of 36,196,594 shares. The stock had previously closed at $510.12.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s decision to disclose Azure revenue separately beginning in fiscal 2027 is improving visibility into its cloud business. Azure generated $29.4 billion in quarterly revenue and $101.9 billion for fiscal 2026, while the company’s remaining performance obligations reached $678 billion. The clearer reporting may help investors assess Microsoft’s position against Amazon Web Services and Google Cloud. Microsoft Finally Reveals Azure’s Core
• Positive Sentiment: Stifel raised its Microsoft price target to $530, citing improving Copilot adoption and artificial-intelligence momentum. OpenAI’s launch of GPT-6 Astra could also benefit Microsoft because Azure customers are reportedly already using the model, strengthening the strategic value of Microsoft’s OpenAI relationship. Stifel raises Microsoft price target
• Neutral Sentiment: Microsoft is reorganizing its reporting structure around “Devices and Consumer” and “Agents and Infra.” The change could make AI economics easier to evaluate, but it may also increase scrutiny of spending and margins once the new disclosures begin.
• Negative Sentiment: Investors remain concerned that Microsoft’s AI buildout is becoming increasingly expensive. Capital expenditures reached about $41 billion in the latest quarter, cloud gross margin reportedly fell to roughly 65% from 67%, and the company plans to continue adding data centers and AI capacity. The risk is that depreciation, power and chip costs could delay returns on the large backlog. Microsoft faces pressure despite cloud and AI growth
• Negative Sentiment: CEO Satya Nadella sold 86,525 shares worth approximately $43.4 million. The sale was executed under a pre-arranged Rule 10b5-1 plan, limiting its value as a business signal, but the transaction can still add short-term sentiment pressure after the stock’s run-up. Satya Nadella sells Microsoft stock
• Negative Sentiment: Microsoft is limiting Xbox Game Pass cloud gaming to 15 hours per month for some subscribers as infrastructure costs rise. The move may improve service economics, but it risks frustrating users and weakening Microsoft’s consumer-gaming proposition. Microsoft limits Xbox cloud gaming

Wall Street Analysts Forecast Growth

MSFT has been the subject of a number of recent analyst reports. Bank of America boosted their target price on shares of Microsoft from $500.00 to $600.00 and gave the company a “buy” rating in a report on Tuesday. KeyCorp reiterated an “overweight” rating on shares of Microsoft in a report on Thursday. Citizens Jmp reissued a “market outperform” rating and set a $550.00 price objective on shares of Microsoft in a research note on Tuesday, July 28th. Barclays dropped their price objective on Microsoft from $545.00 to $512.00 and set an “overweight” rating for the company in a report on Thursday, July 30th. Finally, The Goldman Sachs Group reiterated a “buy” rating and issued a $640.00 target price on shares of Microsoft in a report on Thursday, July 30th. Forty-two equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average price target of $564.27.

Microsoft Stock Down 2.0%

The firm has a fifty day simple moving average of $444.52 and a 200-day simple moving average of $415.80. The company has a market capitalization of $3.71 trillion, a PE ratio of 27.82, a P/E/G ratio of 1.61 and a beta of 1.11. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23.

Microsoft (NASDAQ:MSFT) last issued its earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The business had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. During the same quarter in the prior year, the business posted $3.65 EPS. The company’s revenue for the quarter was up 17.7% on a year-over-year basis. Equities research analysts anticipate that Microsoft Corporation will post 19.59 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 issued a $0.91 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 annualized dividend and a dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is 20.27%.

Insider Buying and Selling at Microsoft

In related news, CEO Judson Althoff sold 10,000 shares of Microsoft stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total value of $4,878,900.00. Following the sale, the chief executive officer directly owned 100,447 shares in the company, valued at $49,007,086.83. This trade represents a 9.05% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total value of $43,388,826.50. Following the sale, the chief executive officer directly owned 486,763 shares in the company, valued at approximately $244,092,173.98. This trade represents a 15.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 108,335 shares of company stock worth $53,499,700. 0.03% of the stock is owned by insiders.

Hedge Funds Weigh In On Microsoft

Hedge funds have recently modified their holdings of the company. Longfellow Investment Management Co. LLC raised its holdings in shares of Microsoft by 51.3% in the 2nd 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 in the last quarter. Montgomery Financial Services LLC bought a new stake in Microsoft during the second quarter worth approximately $26,000. Bernzott Capital Advisors acquired a new position in Microsoft in the fourth quarter worth approximately $34,000. Timmons Wealth Management LLC acquired a new position in Microsoft in the fourth quarter worth approximately $36,000. Finally, Fairway Wealth LLC increased its holdings in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after buying an additional 66 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors and hedge funds.

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).