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

Microsoft Corporation (NASDAQ:MSFT)’s share price fell 4% during mid-day trading 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 changed hands during mid-day trading, an increase of 6% from the average session volume of 35,683,355 shares. The stock had previously closed at $432.92.

Other equities research analysts also recently issued reports about the stock. Wall Street Zen downgraded shares of Microsoft from a “buy” rating to a “hold” rating in a report on Sunday, January 18th. Deutsche Bank Aktiengesellschaft dropped their price target on Microsoft from $630.00 to $575.00 and set a “buy” rating for the company in a research report on Thursday, January 29th. Mizuho dropped their price target on Microsoft from $620.00 to $515.00 and set an “outperform” rating for the company in a research report on Tuesday, April 14th. Weiss Ratings downgraded Microsoft from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Tuesday, March 24th. Finally, Citigroup dropped their price target on Microsoft from $635.00 to $600.00 and set a “buy” rating for the company in a research report on Tuesday. Two investment analysts have rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $575.34.

Insider Activity at Microsoft

In related news, Director John W. Stanton acquired 5,000 shares of the stock in a transaction on Wednesday, February 18th. The stock was purchased at an average price of $397.35 per share, for a total transaction of $1,986,750.00. Following the completion of the transaction, the director owned 83,905 shares of the company’s stock, valued at $33,339,651.75. This trade represents a 6.34% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business’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 value of $5,045,695.92. Following the completion of the sale, the executive vice president owned 137,933 shares of the company’s stock, valued at $56,486,322.16. The trade was a 8.20% decrease in their position. The SEC filing for this sale provides additional information. Insiders own 0.03% of the company’s stock.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Major long‑term investment: Microsoft committed A$25B (~$18B) to expand Azure and AI capacity in Australia through 2029, supporting future cloud/Azure revenue and global infrastructure scale. Microsoft to invest $18 billion in Australia
• Positive Sentiment: Product and security strengthening: Microsoft is integrating advanced models (including Anthropic’s Mythos) into its security development lifecycle — a move that can reduce risk and improve enterprise trust in its AI offerings. Microsoft to integrate Anthropic’s Mythos
• Neutral Sentiment: Upcoming catalyst: Microsoft reports fiscal Q3 earnings on April 29 — analysts and investors see the print as pivotal for clarity on AI monetization, Azure growth and near‑term margins. Prediction: Microsoft’s April 29 Earnings…
• Neutral Sentiment: LinkedIn leadership change: LinkedIn’s CEO transition (Daniel Shapero named) is operationally relevant but not a core driver of Microsoft’s AI/cloud thesis. LinkedIn names new CEO
• Negative Sentiment: Historic voluntary buyouts announced: Microsoft is offering voluntary retirement/buyout packages to up to ~7% of U.S. staff — the first program of this scale in its history. Investors view this as a signal of large reorganization and near‑term restructuring costs tied to a major AI pivot. Microsoft Targets About 7% of Its U.S. Workers With Buyout Offer
• Negative Sentiment: Market reaction and cost concerns: Reports linking the buyout to massive AI spending (estimates in coverage range into the tens of billions to $100B+ scale) have spooked investors, prompting a sell‑off amid uncertainty over timing of returns on that spending. Microsoft Falls 4% as $110 Billion AI Bet Forces Historic Employee Buyout
• Negative Sentiment: Analyst/price‑target pressure: Some shops trimmed targets or adopted cautious ratings as they weigh heavy near‑term AI investment against growth — adding to downside risk into earnings. Rothschild & Co Redburn lowers PT

Institutional Trading of Microsoft

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Longfellow Investment Management Co. LLC increased its stake in shares of Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares during the period. Bernzott Capital Advisors purchased a new position in shares of Microsoft during the fourth quarter valued at approximately $34,000. Timmons Wealth Management LLC purchased a new position in shares of Microsoft during the fourth quarter valued at approximately $36,000. Bayforest Capital Ltd purchased a new position in shares of Microsoft during the third quarter valued at approximately $38,000. Finally, Fairway Wealth LLC increased its stake in shares of Microsoft by 287.0% during 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 during the period. Institutional investors own 71.13% of the company’s stock.

Microsoft Stock Down 4.0%

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 stock has a market capitalization of $3.09 trillion, a PE ratio of 26.00, a PEG ratio of 1.63 and a beta of 1.11. The company has a 50 day moving average price of $393.01 and a 200-day moving average price of $451.84.

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

Microsoft Dividend Announcement

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

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).