Microsoft (NASDAQ:MSFT) Shares Down 2.2% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) shares were down 2.2% during mid-day trading on Wednesday . The company traded as low as $401.01 and last traded at $404.37. Approximately 41,122,875 shares were traded during trading, an increase of 6% from the average daily volume of 38,713,020 shares. The stock had previously closed at $413.27.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Channel/SQL migrations provide steady revenue growth and large contracted backlog (RPO), which supports longer‑term cash flow even as AI capex ramps. This fundamental argument is being pushed as the counterpoint to headline AI worries. MarketBeat: Microsoft’s Cloud Migrations Matter More Than AI Hype
• Positive Sentiment: Microsoft’s sovereign cloud partnership wins (e.g., Capgemini collaboration) and other enterprise deals are giving modest pre‑market support and validate multi‑year enterprise demand. TipRanks: Microsoft Rises on Sovereign Cloud Collab
• Positive Sentiment: Some asset managers and analysts view the post‑earnings sell‑off as a buying opportunity — Wedbush and others highlight the structural AI capex wave as ultimately rewarding scale players like Microsoft. Proactive Investors: Microsoft and Google face $650bn AI spending test
• Neutral Sentiment: Security: Microsoft released patches for actively exploited zero‑day vulnerabilities in Windows and Office — important for customers but unlikely to be a major market driver. TechCrunch: Microsoft fixes critical zero‑day bugs
• Neutral Sentiment: Longer‑term tech themes (quantum, OpenAI linkage) keep Microsoft in investor screens as a hybrid AI/enterprise play; some research notes highlight MSFT’s diversified exposure vs pure‑play quantum names. Zacks: Quantum Hype vs. Profits
• Negative Sentiment: Investor concern over elevated AI/data‑center capex and conservative near‑term Azure guidance triggered steep selling after the earnings release; headlines on “record spending / slowing cloud growth” are the main proximate cause of the downward move. InsiderMonkey: Microsoft Forecasts 37%–38% Azure Growth as Investors Question Heavy Outlays
• Negative Sentiment: Analyst downgrades and fund trimming (e.g., Melius downgrade; some institutional position cuts) amplify selling pressure by signaling elevated risk to free cash flow and margins from sustained AI capex. Yahoo Finance: Melius Downgrades Microsoft to Hold
• Negative Sentiment: Macro/market flow: the broader software/mega‑cap pullback and Nasdaq weakness (Big Tech leading the decline) are contributing to intra‑day pressure on MSFT. 24/7 Wall St.: Nasdaq dragged by Big Tech including Microsoft

Analysts Set New Price Targets

Several research firms have issued reports on MSFT. Royal Bank Of Canada reiterated an “outperform” rating and issued a $640.00 target price on shares of Microsoft in a research note on Thursday, January 29th. KeyCorp cut their price target on shares of Microsoft from $630.00 to $600.00 and set an “overweight” rating for the company in a report on Thursday, January 29th. Barclays reissued a “buy” rating on shares of Microsoft in a research note on Friday, February 6th. JPMorgan Chase & Co. decreased their price objective on Microsoft from $575.00 to $550.00 and set an “overweight” rating for the company in a research note on Thursday, January 29th. Finally, Evercore decreased their price objective on shares of Microsoft from $640.00 to $580.00 and set an “outperform” rating for the company in a research note on Thursday, January 29th. Two investment analysts have rated the stock with a Strong Buy rating, thirty-nine have assigned a Buy rating and four have assigned a Hold rating to the stock. According to MarketBeat.com, Microsoft currently has an average rating of “Moderate Buy” and a consensus price target of $591.95.

Microsoft Price Performance

The stock’s fifty day moving average price is $465.44 and its 200-day moving average price is $494.72. The firm has a market cap of $3.00 trillion, a PE ratio of 25.29, a P/E/G ratio of 1.62 and a beta of 1.08. The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.38 and a current ratio of 1.39.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 earnings per share for the quarter, beating the consensus estimate of $3.86 by $0.28. The firm had revenue of $81.27 billion during the quarter, compared to the consensus estimate of $80.28 billion. Microsoft had a return on equity of 32.34% and a net margin of 39.04%.Microsoft’s quarterly revenue was up 16.7% on a year-over-year basis. During the same period last year, the business posted $3.23 EPS. As a group, equities analysts forecast that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a $0.91 dividend. The ex-dividend date is Thursday, February 19th. This represents a $3.64 annualized dividend and a dividend yield of 0.9%. Microsoft’s payout ratio is currently 22.76%.

Insider Transactions at Microsoft

In other Microsoft news, EVP Takeshi Numoto sold 2,850 shares of the firm’s stock in a transaction dated 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 completion of the transaction, 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 transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CEO Judson Althoff sold 12,750 shares of the company’s stock in a transaction dated Tuesday, December 2nd. The shares were 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 directly owned 129,349 shares in the company, valued at $63,577,620.48. This trade represents a 8.97% decrease in their position. The SEC filing for this sale provides additional information. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

Several hedge funds have recently bought and sold shares of MSFT. Premier Private Wealth Management LLC purchased a new stake in shares of Microsoft in the fourth quarter valued at $1,316,000. Marest Capital LLC increased its position in Microsoft by 4.3% during the 4th quarter. Marest Capital LLC now owns 12,876 shares of the software giant’s stock worth $6,227,000 after purchasing an additional 527 shares in the last quarter. Stirlingshire Investments Inc. acquired a new position in Microsoft in the 4th quarter valued at about $840,000. CSM Advisors LLC lifted its holdings in Microsoft by 5.5% in the 4th quarter. CSM Advisors LLC now owns 82,944 shares of the software giant’s stock valued at $40,112,000 after purchasing an additional 4,331 shares in the last quarter. Finally, Cornerstone Advisors Asset Management LLC boosted its stake in shares of Microsoft by 91.2% during the 4th quarter. Cornerstone Advisors Asset Management LLC now owns 2,719 shares of the software giant’s stock worth $1,315,000 after purchasing an additional 1,297 shares during the last quarter. Hedge funds and other institutional investors own 71.13% of the company’s stock.

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).