Microsoft (NASDAQ:MSFT) Trading Down 2.3% After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT) shares fell 2.3% during trading on Wednesday after Rothschild & Co Redburn lowered their price target on the stock from $500.00 to $450.00. Rothschild & Co Redburn currently has a neutral rating on the stock. Microsoft traded as low as $438.68 and last traded at $444.11. 37,537,764 shares changed hands during mid-day trading, an increase of 45% from the average session volume of 25,956,799 shares. The stock had previously closed at $454.52.

Several other research analysts have also recently weighed in on the company. Cantor Fitzgerald set a $639.00 target price on Microsoft in a research note on Thursday, October 30th. BMO Capital Markets reduced their price objective on shares of Microsoft from $650.00 to $625.00 and set an “outperform” rating for the company in a research report on Thursday, October 30th. Wedbush reiterated an “outperform” rating and issued a $625.00 target price on shares of Microsoft in a report on Monday, December 22nd. Weiss Ratings reissued a “buy (b)” rating on shares of Microsoft in a research note on Wednesday, October 8th. Finally, Daiwa Capital Markets decreased their price target on shares of Microsoft from $640.00 to $630.00 and set a “buy” rating on the stock in a research report on Friday, November 7th. Three research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and three have assigned a Hold rating to the company. Based on data from MarketBeat, Microsoft has a consensus rating of “Buy” and a consensus target price of $624.05.

Insider Buying and Selling at Microsoft

In related news, insider Bradford L. Smith sold 38,500 shares of the business’s stock in a transaction that occurred on Monday, November 3rd. The shares were sold at an average price of $518.64, for a total transaction of $19,967,640.00. Following the transaction, the insider directly owned 461,597 shares of the company’s stock, valued at approximately $239,402,668.08. The trade was a 7.70% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CEO Judson Althoff sold 12,750 shares of the stock in a transaction that occurred on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the completion of the sale, the chief executive officer owned 129,349 shares of the company’s stock, valued at approximately $63,577,620.48. The trade was a 8.97% 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 valued at $27,598,872 in the last 90 days. 0.03% of the stock is currently owned by corporate insiders.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Major industry and healthcare partnerships bolster MSFT’s commercial AI narrative — Bristol Myers Squibb will use Microsoft’s AI radiology tools to speed lung cancer detection, a commercial validation for Azure/AI revenue mix. Bristol Myers partners with Microsoft for AI-driven lung cancer detection
• Positive Sentiment: Enterprise product integration: Board announced Board Agents built on Microsoft Foundry, signaling more platform-level demand for Azure agentic AI services. Board Collaborates with Microsoft to Bring Agentic AI Into the Core of Enterprise Planning
• Positive Sentiment: Marketplace and ISV ecosystem wins continue to expand commercial reach (Cobalt Teams integration, RKON Marketplace activity), supporting recurring revenue and GTM leverage. Cobalt Microsoft® Teams® Integration Now Available in the Microsoft Marketplace®
• Positive Sentiment: Top analysts still see long-term upside — Goldman Sachs reiterated Buy and keeps a high price target, reflecting belief that AI + cloud growth offsets higher power/capex. Microsoft: Maintaining a Buy Rating as AI and Cloud Growth Offset Structurally Higher Power Costs
• Neutral Sentiment: TD Cowen trimmed its price target (from $655 to $625) but kept a Buy rating, noting Azure capacity constraints that may keep the stock range-bound before earnings. TD Cowen Sees Microsoft (MSFT) Shares Range-Bound Ahead of Earnings
• Neutral Sentiment: Investors are focused on MSFT’s upcoming earnings report on Jan. 28 — expectations are elevated, so results and commentary on Azure capacity/costs will likely drive near-term volatility. Dear Microsoft Stock Fans, Mark Your Calendars for January 28
• Negative Sentiment: Analyst downgrades/price-target cuts are weighing on sentiment — Rothschild & Co Redburn cut its PT to $450 and moved to Neutral, tightening near-term upside assumptions. Rothschild & Co Redburn adjusts price target on Microsoft to 450 from 500, maintains neutral rating
• Negative Sentiment: CEO Satya Nadella’s public warnings that AI could “lose social permission” if it burns energy without real-world benefits have raised regulatory/PR risk and highlighted rising energy/capex pressures for hyperscalers. Microsoft CEO Satya Nadella Warns AI Could Lose ‘Social Permission’ If It Burns Energy Without Real-World Benefits In Health And Education
• Negative Sentiment: Reports that Azure growth and forward guidance previously fell short of expectations — plus capacity constraints — are pressuring near-term growth multiple assumptions. Microsoft (MSFT) Traded Lower as Its Reported Azure Cloud Growth and Forward Guidance Fell Short of Expectations

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the company. Norges Bank bought a new position in shares of Microsoft in the 2nd quarter valued at approximately $50,493,678,000. Kingstone Capital Partners Texas LLC grew its holdings in Microsoft by 564,387.1% during the second quarter. Kingstone Capital Partners Texas LLC now owns 90,549,369 shares of the software giant’s stock valued at $45,040,162,000 after purchasing an additional 90,533,328 shares during the last quarter. Nuveen LLC bought a new position in shares of Microsoft in the first quarter valued at approximately $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its stake in shares of Microsoft by 500.0% in the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after buying an additional 49,618,571 shares during the last quarter. Finally, Laurel Wealth Advisors LLC boosted its holdings in shares of Microsoft by 49,640.3% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock worth $14,905,904,000 after buying an additional 29,906,791 shares during the period. 71.13% of the stock is owned by institutional investors and hedge funds.

Microsoft Stock Down 2.3%

The firm has a market capitalization of $3.30 trillion, a price-to-earnings ratio of 31.59, a price-to-earnings-growth ratio of 1.70 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. The business’s 50 day moving average is $480.62 and its 200-day moving average is $501.75.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, October 29th. The software giant reported $4.13 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.65 by $0.48. The company had revenue of $77.67 billion during the quarter, compared to analysts’ expectations of $75.49 billion. Microsoft had a net margin of 35.71% and a return on equity of 32.45%. The business’s quarterly revenue was up 18.4% compared to the same quarter last year. During the same period in the prior year, the company earned $3.30 earnings per share. Equities analysts anticipate that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Stockholders of record on Thursday, February 19th will be issued a dividend of $0.91 per share. The ex-dividend date is Thursday, February 19th. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. Microsoft’s payout ratio is presently 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).