Microsoft (NASDAQ:MSFT) Trading Down 1.5% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) shares traded down 1.5% during mid-day trading on Tuesday . The stock traded as low as $390.69 and last traded at $393.83. Approximately 30,454,649 shares were traded during mid-day trading, a decline of 15% from the average daily volume of 35,727,098 shares. The stock had previously closed at $399.76.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft-backed OpenAI is expanding interest-based ads in ChatGPT in Japan, reinforcing the broader AI ecosystem Microsoft is tied to and potentially supporting future AI monetization. OpenAI Brings ChatGPT Ads to Japan
• Positive Sentiment: Reports say ByteDance/TikTok is on track to spend more than $1 billion annually on Microsoft AI and cloud services in China, highlighting strong demand for Azure and Microsoft’s AI models. Microsoft Builds $1 Billion-Plus AI Business With ByteDance
• Positive Sentiment: Microsoft is continuing to win AI and cloud business in China, with ByteDance emerging as a major customer, which supports the growth narrative around Azure. Microsoft expands AI business in China, with ByteDance emerging as top customer
• Neutral Sentiment: Analysts continue debating whether Microsoft’s AI growth is enough to offset concerns about high spending and rich valuation, so investor sentiment remains mixed. Microsoft Faces AI Expectations Test
• Neutral Sentiment: Microsoft is drawing positive attention as an AI leader, but some commentary says the stock’s AI optimism may already be largely priced in. Is The AI Boom Already Priced Out of Microsoft Stock?
• Negative Sentiment: Microsoft is facing multiple securities class-action and investigation headlines tied to alleged misleading AI statements, which could weigh on sentiment and create legal overhang. Bronstein, Gewirtz & Grossman LLC Urges Microsoft Corporation Investors to Act: Class Action Filed Alleging Investor Harm
• Negative Sentiment: Another report says Microsoft’s Copilot power-user pricing changes are bad news for heavy users, raising the risk of customer pushback if AI costs get passed through too aggressively. Microsoft just delivered power users bad news
• Negative Sentiment: Microsoft reportedly walked away from a potential $3 billion Oracle cloud deal over security concerns, a sign that capacity constraints and compliance issues may be limiting growth. Why Microsoft Stock Slumped Today

Analyst Ratings Changes

MSFT has been the subject of a number of recent research reports. Phillip Securities upgraded shares of Microsoft to a “buy” rating and set a $485.00 price objective for the company in a report on Wednesday, May 13th. Dbs Bank reduced their target price on shares of Microsoft from $678.00 to $573.00 in a report on Thursday, May 7th. BMO Capital Markets decreased their target price on shares of Microsoft from $575.00 to $505.00 and set an “outperform” rating on the stock in a research report on Tuesday, April 28th. Weiss Ratings downgraded shares of Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, March 24th. Finally, TD Cowen restated a “buy” rating and set a $540.00 price target on shares of Microsoft in a research report 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. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $561.20.

Microsoft Price Performance

The stock has a market cap of $2.82 trillion, a PE ratio of 22.58, a PEG ratio of 1.42 and a beta of 1.11. The business’s 50-day simple moving average is $412.13 and its 200-day simple moving average is $426.70. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08.

Microsoft (NASDAQ:MSFT) last posted its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping analysts’ consensus estimates of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $82.89 billion during the quarter, compared to analyst estimates of $81.44 billion. During the same period in the prior year, the business posted $3.46 earnings per share. Microsoft’s revenue for the quarter was up 18.3% on a year-over-year basis. On average, research analysts expect that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Announces Dividend

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

Insider Transactions at Microsoft

In other news, EVP Takeshi Numoto sold 4,500 shares of the business’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 transaction of $1,812,780.00. Following the transaction, the executive vice president directly owned 47,468 shares of the company’s stock, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of the company’s stock in a transaction that occurred on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the transaction, the executive vice president owned 46,003 shares of the company’s stock, valued at approximately $18,922,874.02. This represents a 2.67% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in MSFT. Longfellow Investment Management Co. LLC raised its holdings in 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 in the last quarter. Bernzott Capital Advisors purchased a new position in Microsoft during the fourth quarter valued at $34,000. Timmons Wealth Management LLC bought a new stake in shares of Microsoft during the 4th quarter valued at $36,000. Fairway Wealth LLC boosted its holdings in shares of Microsoft by 287.0% during 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 in the last quarter. Finally, LSV Asset Management purchased a new stake in shares of Microsoft in the 4th quarter worth about $44,000. 71.13% of the stock is currently owned by institutional investors.

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).