Microsoft (NASDAQ:MSFT) Trading Down 3.2% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) traded down 3.2% during mid-day trading on Monday . The company traded as low as $383.10 and last traded at $384.47. 42,959,620 shares were traded during trading, an increase of 14% from the average session volume of 37,733,320 shares. The stock had previously closed at $397.23.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: OpenAI’s updated spending plan still benefits Microsoft because it sustains strong demand for cloud AI infrastructure and licensing, supporting Azure revenue tailwinds. OpenAI Spending Plan Positive for Microsoft (TipRanks)
• Positive Sentiment: Microsoft is winning ecosystem deals and marketplace distribution (CrowdStrike on Microsoft Marketplace; third‑party AI apps now available), which helps monetize Azure and enterprise software beyond raw infrastructure. Microsoft Positions for Long-Term AI and Enterprise Growth (InsiderMonkey)
• Positive Sentiment: Hardware progress: analyst notes that Microsoft’s Maia 200 accelerator narrows performance gaps vs. rivals, supporting Azure competitiveness for AI workloads. That underpins longer‑term cloud share and pricing power. Maia 200 Closes Gap With AI Competitors (Benzinga)
• Positive Sentiment: Insider buying and technical signals: a director bought shares and MarketBeat highlights oversold indicators — a potential near‑term buyer base and contrarian signal. Insider Buy & Oversold Signals (MarketBeat)
• Neutral Sentiment: Citi and other firms still find value in Microsoft—some analysts recommend buys while others trim ratings; mixed sell‑side views add volatility but not a clear directional catalyst. Citi Analysts on Microsoft (Barchart)
• Negative Sentiment: Leadership change in gaming: Phil Spencer’s retirement and Asha Sharma’s promotion triggered investor unease about near-term gaming revenue and strategic shifts toward AI-first gaming initiatives. That news pressured the stock. Gaming Reinvents Itself; Sharma Named CEO (PYMNTS)
• Negative Sentiment: CapEx and margin anxiety: reports flag a large surge in hyperscaler capex (and a 66% jump in Microsoft’s capex in recent quarter), raising questions about timing of returns from data‑center and AI infrastructure builds. CapEx Pressure From AI Spending (Zacks)
• Negative Sentiment: Analyst downgrades, sector rotation and headline risk: some outlets and fund managers have trimmed Microsoft exposure amid a broader pullback in mega‑cap tech, and critical commentary (including high‑profile skeptics) fuels short-term selling. Palantir Upgraded, Microsoft Downgraded (InvestorPlace)

Wall Street Analysts Forecast Growth

MSFT has been the subject of a number of recent research reports. Guggenheim reaffirmed a “buy” rating and set a $586.00 price objective on shares of Microsoft in a research report on Thursday, January 22nd. Stifel Nicolaus restated a “hold” rating and set a $392.00 price target (down previously from $540.00) on shares of Microsoft in a research note on Thursday, February 5th. Citigroup decreased their price target on Microsoft from $660.00 to $635.00 and set a “buy” rating for the company in a report on Thursday, January 29th. Jefferies Financial Group reissued a “buy” rating on shares of Microsoft in a research note on Thursday, January 22nd. Finally, Wolfe Research cut their price objective on shares of Microsoft from $625.00 to $530.00 and set an “outperform” rating for the company in a research report on Thursday, January 29th. Two 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’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $591.95.

Microsoft Trading Down 3.2%

The company has a market cap of $2.85 trillion, a price-to-earnings ratio of 24.04, a P/E/G ratio of 1.55 and a beta of 1.08. The business has a fifty day simple moving average of $452.13 and a 200 day simple moving average of $487.79. The company has a quick ratio of 1.38, a current ratio of 1.39 and a debt-to-equity ratio of 0.09.

Microsoft (NASDAQ:MSFT) last announced its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 EPS 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 analysts’ expectations of $80.28 billion. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The business’s revenue for the quarter was up 16.7% compared to the same quarter last year. During the same quarter last year, the business earned $3.23 earnings per share. On average, equities analysts anticipate that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, March 12th. Stockholders of record on Thursday, February 19th will be paid a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, February 19th. This represents a $3.64 annualized dividend and a dividend yield of 0.9%. Microsoft’s payout ratio is 22.76%.

Insider Buying and Selling

In other Microsoft news, CEO Judson Althoff sold 12,750 shares of the company’s stock in a transaction on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total value of $6,266,880.00. Following the sale, the chief executive officer owned 129,349 shares of the company’s stock, valued at approximately $63,577,620.48. This represents a 8.97% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Takeshi Numoto sold 2,850 shares of the firm’s stock in a transaction 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 transaction, the executive vice president owned 55,782 shares of the company’s stock, valued at approximately $26,703,959.04. This represents a 4.86% decrease in their position. The SEC filing for this sale provides additional information. Insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

Large investors have recently added to or reduced their stakes in the business. Longfellow Investment Management Co. LLC boosted its stake in shares of Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after purchasing an additional 20 shares in the last quarter. Bernzott Capital Advisors acquired a new stake in shares of Microsoft during the 4th quarter worth about $34,000. Bayforest Capital Ltd acquired a new position in Microsoft in the third quarter valued at about $38,000. Timmons Wealth Management LLC bought a new stake in Microsoft during the fourth quarter worth about $36,000. Finally, Fairway Wealth LLC grew its stake in Microsoft by 287.0% during the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after buying an additional 66 shares during the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

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).