Microsoft (NASDAQ:MSFT) Shares Gap Down After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT)’s stock price gapped down prior to trading on Thursday after Scotiabank lowered their price target on the stock from $650.00 to $600.00. The stock had previously closed at $481.63, but opened at $439.99. Scotiabank currently has a sector outperform rating on the stock. Microsoft shares last traded at $421.8740, with a volume of 54,732,892 shares changing hands.

Several other equities analysts also recently weighed in on MSFT. Guggenheim reissued a “buy” rating and set a $586.00 target price on shares of Microsoft in a research report on Thursday, January 22nd. The Goldman Sachs Group dropped their price objective on shares of Microsoft from $655.00 to $600.00 and set a “buy” rating for the company in a research note on Thursday. Citigroup reduced their target price on shares of Microsoft from $660.00 to $635.00 and set a “buy” rating on the stock in a research note on Thursday. Wolfe Research dropped their price target on shares of Microsoft from $675.00 to $625.00 and set an “outperform” rating for the company in a research note on Monday, December 15th. Finally, Morgan Stanley reiterated an “overweight” rating on shares of Microsoft in a report on Thursday. One investment analyst has rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating and three have given a Hold rating to the company’s stock. According to MarketBeat, Microsoft has an average rating of “Moderate Buy” and an average price target of $599.72.

Insider Activity at Microsoft

In other news, insider Bradford L. Smith sold 38,500 shares of the firm’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. This trade represents a 7.70% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Takeshi Numoto sold 2,850 shares of the business’s stock in a transaction that occurred on Thursday, December 4th. The shares were sold at an average price of $478.72, for a total value of $1,364,352.00. Following the completion of the sale, the executive vice president owned 55,782 shares of the company’s stock, valued at $26,703,959.04. The trade was a 4.86% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 54,100 shares of company stock worth $27,598,872 in the last 90 days. 0.03% of the stock is owned by corporate insiders.

Microsoft News Roundup

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

A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Vanguard Group Inc. raised its stake in Microsoft by 2.3% in the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after buying an additional 15,955,898 shares in the last quarter. State Street Corp increased its holdings in shares of Microsoft by 1.1% in the 2nd quarter. State Street Corp now owns 299,196,519 shares of the software giant’s stock valued at $148,823,341,000 after acquiring an additional 3,166,275 shares during the period. Geode Capital Management LLC raised its position in shares of Microsoft by 2.0% in the 2nd quarter. Geode Capital Management LLC now owns 179,001,751 shares of the software giant’s stock worth $88,714,256,000 after acquiring an additional 3,532,054 shares in the last quarter. Norges Bank purchased a new stake in shares of Microsoft during the 2nd quarter worth $50,493,678,000. Finally, Northern Trust Corp lifted its stake in shares of Microsoft by 16.1% during the 4th quarter. Northern Trust Corp now owns 83,787,746 shares of the software giant’s stock worth $35,316,535,000 after purchasing an additional 11,600,470 shares during the last quarter. Institutional investors own 71.13% of the company’s stock.

Microsoft Stock Performance

The business has a 50-day moving average of $476.67 and a two-hundred day moving average of $500.21. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39. The company has a market cap of $3.22 trillion, a P/E ratio of 27.11, a P/E/G ratio of 1.94 and a beta of 1.07.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating the consensus estimate of $3.86 by $0.28. Microsoft had a net margin of 39.04% and a return on equity of 33.48%. The business had revenue of $81.27 billion during 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% on a year-over-year basis. On average, sell-side analysts predict that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Dividend Announcement

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

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).