Microsoft (NASDAQ:MSFT) Trading Down 5% Following Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT)’s share price dropped 5% during mid-day trading on Thursday after Daiwa Capital Markets lowered their price target on the stock from $630.00 to $600.00. Daiwa Capital Markets currently has a buy rating on the stock. Microsoft traded as low as $392.32 and last traded at $393.67. Approximately 65,236,466 shares traded hands during mid-day trading, an increase of 74% from the average daily volume of 37,398,906 shares. The stock had previously closed at $414.19.

A number of other equities analysts have also weighed in on MSFT. Jefferies Financial Group restated a “buy” rating on shares of Microsoft in a report on Thursday, January 22nd. Wolfe Research decreased their price target on Microsoft from $625.00 to $530.00 and set an “outperform” rating for the company in a research note on Thursday, January 29th. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $640.00 price target on shares of Microsoft in a report on Thursday, January 29th. UBS Group reiterated an “outperform” rating on shares of Microsoft in a report on Thursday, January 29th. Finally, Rothschild Redb cut shares of Microsoft from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, November 18th. Two investment analysts have rated the stock with a Strong Buy rating, thirty-nine have issued a Buy rating and four have given a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $593.28.

Insider Activity at Microsoft

In other news, CEO Judson Althoff sold 12,750 shares of the stock in a transaction that occurred on Tuesday, December 2nd. The shares were sold at an average price of $491.52, for a total value of $6,266,880.00. Following the transaction, the chief executive officer owned 129,349 shares in the company, valued at $63,577,620.48. This represents a 8.97% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at 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 transaction of $1,364,352.00. Following the sale, the executive vice president owned 55,782 shares of the company’s stock, valued at $26,703,959.04. This trade represents a 4.86% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 0.03% of the stock is owned by corporate insiders.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft beat Q2 expectations on Jan. 28 and reported a record cloud quarter, supporting the long-term growth case for Azure and Copilot adoption improvements. Read More.
• Positive Sentiment: Certain analysts remain bullish: TD Cowen and Piper Sandler reiterated Buy/Overweight views and high price targets (~$600+), arguing Microsoft remains a top AI hyperscaler play despite near-term noise. Read More.
• Neutral Sentiment: Microsoft is partnering with the UK government on deepfake detection — a credibility/PR positive but limited near-term revenue impact. Read More.
• Neutral Sentiment: Management changes in security leadership and commercial reorganization indicate ongoing operational adjustments; these are execution items investors should monitor. Read More.
• Negative Sentiment: Stifel issued a rare downgrade to Hold, flagging slower Azure growth, rising AI infrastructure and inference costs, and tougher cloud competition (Google, Anthropic). That downgrade catalyzed much of today’s selling. Read More.
• Negative Sentiment: Analysts and media highlight OpenAI-related liabilities, Copilot adoption slippage and product usability problems — these raise questions about near-term monetization of AI investments. Read More.
• Negative Sentiment: Price-target trims and broad software-sector rotation amplified the move; multiple outlets cited analyst cuts and hedge-fund positioning as technical selling pressure. Read More.
• Negative Sentiment: Market worry over AI capex and margin pressure: some notes point to heavy near-term GPU/inference spending that could compress margins before revenue from AI products scales. Read More.

Institutional Trading of Microsoft

Several hedge funds have recently bought and sold shares of the stock. Longfellow Investment Management Co. LLC increased its stake in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after purchasing an additional 20 shares in the last quarter. Bernzott Capital Advisors bought a new position in Microsoft in the 4th quarter worth $34,000. Bayforest Capital Ltd purchased a new stake in Microsoft in the 3rd quarter worth $38,000. Fairway Wealth LLC raised its holdings in 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 acquiring an additional 66 shares during the period. Finally, Sellwood Investment Partners LLC purchased a new position in shares of Microsoft in the third quarter valued at about $49,000. Institutional investors own 71.13% of the company’s stock.

Microsoft Stock Performance

The company has a quick ratio of 1.38, a current ratio of 1.39 and a debt-to-equity ratio of 0.09. The business has a 50 day moving average price of $470.24 and a two-hundred day moving average price of $496.99. The stock has a market cap of $2.92 trillion, a P/E ratio of 24.62, a price-to-earnings-growth ratio of 1.62 and a beta of 1.08.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, topping analysts’ consensus estimates of $3.86 by $0.28. Microsoft had a return on equity of 32.34% and a net margin of 39.04%.The company 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 EPS. The firm’s revenue was up 16.7% compared to the same quarter last year. On average, sell-side analysts forecast that Microsoft Corporation will post 13.08 earnings per share for the current fiscal year.

Microsoft Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a dividend of $0.91 per share. The ex-dividend date is Thursday, February 19th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. Microsoft’s dividend payout ratio is currently 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).