Microsoft (NASDAQ:MSFT) Trading Down 10% After Analyst Downgrade

Shares of Microsoft Corporation (NASDAQ:MSFT) traded down 10% during trading on Thursday after Scotiabank lowered their price target on the stock from $650.00 to $600.00. Scotiabank currently has a sector outperform rating on the stock. Microsoft traded as low as $421.02 and last traded at $433.50. 127,837,789 shares were traded during mid-day trading, an increase of 289% from the average session volume of 32,841,941 shares. The stock had previously closed at $481.63.

A number of other brokerages also recently issued reports on MSFT. Wolfe Research lowered their price target on shares of Microsoft from $675.00 to $625.00 and set an “outperform” rating on the stock in a report on Monday, December 15th. Rothschild Redb lowered shares of Microsoft from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, November 18th. JPMorgan Chase & Co. dropped their target price on Microsoft from $575.00 to $550.00 and set an “overweight” rating on the stock in a research report on Thursday. Rothschild & Co Redburn reduced their price target on Microsoft from $500.00 to $450.00 and set a “neutral” rating for the company in a report on Wednesday, January 21st. Finally, Sanford C. Bernstein reiterated an “outperform” rating and set a $641.00 price target (down previously from $645.00) on shares of Microsoft in a research report on Thursday. One investment analyst has rated the stock with a Strong Buy rating, thirty-eight have given a Buy rating and three have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Microsoft has an average rating of “Moderate Buy” and a consensus target price of $599.72.

Insider Activity

In other Microsoft news, insider Bradford L. Smith sold 38,500 shares of the firm’s stock in a transaction on Monday, November 3rd. The stock was sold at an average price of $518.64, for a total value of $19,967,640.00. Following the transaction, the insider owned 461,597 shares in the company, valued at approximately $239,402,668.08. This trade represents a 7.70% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, EVP Takeshi Numoto sold 2,850 shares of Microsoft stock in a transaction on Thursday, December 4th. The stock was sold at an average price of $478.72, for a total transaction 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 position. The SEC filing for this sale provides additional information. Insiders have sold a total of 54,100 shares of company stock worth $27,598,872 over the last quarter. 0.03% of the stock is currently owned by corporate insiders.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Q2 beat on top and bottom lines — EPS $4.14 and revenue $81.27B, with Microsoft Cloud topping $50B and Azure still growing robustly—this underpins the long‑term growth thesis. Microsoft beats Wall Street expectations
• Positive Sentiment: OpenAI and AI revenue contribution is material — the company reported meaningful gains tied to OpenAI that help justify the AI investment narrative. Microsoft gained $7.6 billion from OpenAI
• Neutral Sentiment: Microsoft unveiled its Maia 200 AI accelerator — a strategic product for in‑house AI capability, but commercial impact/timing is uncertain and longer term. Microsoft launches Maia 200 AI accelerator
• Negative Sentiment: Record AI capex spooked investors — Q2 capex (~$37.5B) rose sharply and management signaled continued heavy spending; markets worried about the timing and ROI of that investment. Microsoft sheds $430bn in market value as AI spending spooks investors
• Negative Sentiment: Investor reaction: a historic one‑day market‑cap wipe and broad tech weakness as traders rotated into names (like Meta) that showed clearer near‑term payoff from AI spend. Microsoft lost $357 billion in market cap as stock plunged
• Negative Sentiment: Analysts trimmed targets and flagged near‑term risk — several firms cut price targets or adjusted estimates citing slower Azure growth and heavier capex, increasing near‑term downside risk. These analysts slash their forecasts on Microsoft

Hedge Funds Weigh In On Microsoft

Institutional investors and hedge funds have recently bought and sold shares of the business. Longfellow Investment Management Co. LLC increased its stake 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 acquiring an additional 20 shares during the last quarter. Westend Capital Management LLC grew its holdings in shares of Microsoft by 386.7% in the second quarter. Westend Capital Management LLC now owns 73 shares of the software giant’s stock valued at $36,000 after purchasing an additional 58 shares during the period. Bayforest Capital Ltd acquired a new stake in Microsoft during the third quarter worth about $38,000. Fairway Wealth LLC raised its stake in Microsoft by 287.0% during the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after purchasing an additional 66 shares during the period. Finally, Sellwood Investment Partners LLC acquired a new position in Microsoft in the 3rd quarter valued at about $49,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Microsoft Stock Performance

The firm’s 50 day moving average price is $476.67 and its two-hundred day moving average price is $500.21. The firm has a market cap of $3.22 trillion, a PE ratio of 27.11, a PEG ratio of 1.94 and a beta of 1.07. The company has a debt-to-equity ratio of 0.10, a quick ratio of 1.39 and a current ratio of 1.40.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating analysts’ consensus estimates of $3.86 by $0.28. The firm had revenue of $81.27 billion for the quarter, compared to analysts’ expectations of $80.28 billion. Microsoft had a return on equity of 33.48% and a net margin of 39.04%.The firm’s quarterly revenue was up 16.7% on a year-over-year basis. During the same period in the prior year, the firm posted $3.23 earnings per share. On average, research analysts forecast that Microsoft Corporation will post 13.08 earnings per share for the current year.

Microsoft Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Thursday, March 12th. Stockholders of record on Thursday, February 19th will be paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. The ex-dividend date of this dividend is Thursday, February 19th. Microsoft’s dividend payout ratio is 25.89%.

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).