Microsoft (NASDAQ:MSFT) Trading Down 4% After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT)’s share price fell 4% on Thursday after Rothschild & Co Redburn lowered their price target on the stock from $450.00 to $400.00. Rothschild & Co Redburn currently has a neutral rating on the stock. Microsoft traded as low as $411.41 and last traded at $415.75. 37,900,964 shares traded hands during trading, an increase of 6% from the average session volume of 35,683,355 shares. The stock had previously closed at $432.92.

Several other research firms have also weighed in on MSFT. Wall Street Zen lowered shares of Microsoft from a “buy” rating to a “hold” rating in a research note on Sunday, January 18th. Guggenheim reissued a “buy” rating and set a $586.00 price objective on shares of Microsoft in a research note on Thursday, January 22nd. Melius Research set a $430.00 price objective on shares of Microsoft in a research note on Monday, February 9th. Weiss Ratings lowered shares of Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, March 24th. Finally, KeyCorp dropped their target price on shares of Microsoft from $630.00 to $600.00 and set an “overweight” rating on the stock in a report on Thursday, January 29th. Two investment analysts have rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $575.34.

Insider Activity at Microsoft

In other Microsoft news, EVP Kathleen T. Hogan sold 12,321 shares of the firm’s stock in a transaction that occurred on Friday, March 6th. The shares were sold at an average price of $409.52, for a total transaction of $5,045,695.92. Following the sale, the executive vice president directly owned 137,933 shares in the company, valued at approximately $56,486,322.16. This trade represents a 8.20% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. Also, Director John W. Stanton acquired 5,000 shares of the stock in a transaction dated Wednesday, February 18th. The stock was acquired at an average price of $397.35 per share, for a total transaction of $1,986,750.00. Following the completion of the acquisition, the director directly owned 83,905 shares of the company’s stock, valued at $33,339,651.75. The trade was a 6.34% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Company 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: Microsoft announced a large multiyear AI infrastructure investment in Australia (A$25bn / ~$18bn) to expand Azure AI capacity and cybersecurity partnerships — a long?term growth catalyst for Azure and AI monetization. Microsoft to invest $18 billion in Australia
• Positive Sentiment: Microsoft is integrating Anthropic’s Claude Mythos into its security development lifecycle — a move that strengthens product security and could reduce risk for enterprise customers, supporting Azure and security?product positioning. Microsoft to integrate Anthropic’s Mythos
• Positive Sentiment: Some analysts remain bullish and are using the pullback as a buying opportunity; Piper Sandler and other firms continue to cite Copilot and Azure as durable growth drivers. Piper Sandler says it’s time to step in
• Neutral Sentiment: Microsoft will report fiscal Q3 earnings on April 29 — the print is a near?term catalyst that could either validate AI monetization progress or raise fresh concerns about margins and spending. Microsoft Q3 earnings date
• Neutral Sentiment: Leadership and product updates: LinkedIn’s CEO transition and Xbox Game Pass pricing moves are operational items that affect specific revenue streams but are unlikely to change Microsoft’s core cloud/AI thesis immediately. LinkedIn CEO change
• Negative Sentiment: Microsoft is offering voluntary buyouts to U.S. employees (eligible: senior director level and below; ~7% of U.S. workforce reported) as it reorganizes around AI — the move signals near?term restructuring costs, changes to bonus/stock award policies, and uncertainty over execution of a major AI spending program. Microsoft plans first voluntary employee buyout
• Negative Sentiment: Market reaction: the buyout and the scale of near?term AI spending have driven a sector?wide reprice and prompted some price?target cuts and renewed downside risk sentiment among investors. Market reaction to buyout and AI spending
• Negative Sentiment: Some firms have trimmed targets/ratings amid the spending ramp (example: Rothschild & Co Redburn lowered its price target), increasing the potential for further near?term volatility. Rothschild & Co Redburn lowers PT

Institutional Trading of Microsoft

A number of hedge funds and other institutional investors have recently made changes to their positions in MSFT. WFA Asset Management Corp increased its holdings in Microsoft by 27.0% during the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant’s stock worth $427,000 after buying an additional 216 shares during the last quarter. Ironwood Wealth Management LLC. raised its position in Microsoft by 0.3% during the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant’s stock worth $5,658,000 after acquiring an additional 38 shares in the last quarter. Discipline Wealth Solutions LLC raised its position in Microsoft by 410.4% during the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant’s stock worth $1,144,000 after acquiring an additional 2,138 shares in the last quarter. Wealth Group Ltd. raised its position in Microsoft by 1.2% during the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant’s stock worth $1,000,000 after acquiring an additional 28 shares in the last quarter. Finally, Eagle Capital Management LLC raised its position in Microsoft by 0.4% during the fourth quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant’s stock worth $9,735,000 after acquiring an additional 96 shares in the last quarter. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Microsoft Price Performance

The company has a debt-to-equity ratio of 0.09, a current ratio of 1.39 and a quick ratio of 1.38. The company’s 50-day simple moving average is $392.73 and its 200-day simple moving average is $452.09. The stock has a market capitalization of $3.09 trillion, a P/E ratio of 26.00, a price-to-earnings-growth ratio of 1.60 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, January 28th. The software giant reported $4.14 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.86 by $0.28. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The firm had revenue of $81.27 billion for the quarter, compared to analyst estimates of $80.28 billion. During the same period in the prior year, the firm posted $3.23 earnings per share. The company’s quarterly revenue was up 16.7% compared to the same quarter last year. As a group, sell-side analysts expect that Microsoft Corporation will post 16.54 EPS for the current fiscal year.

Microsoft Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft’s dividend payout ratio is 22.76%.

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).