Microsoft (NASDAQ:MSFT) Stock Falls 1.3% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) fell 1.3% during trading on Monday. The company traded as low as $502.22 and last traded at $509.22. Approximately 19,539,754 shares traded hands during mid-day trading, a decline of 44% from the average session volume of 34,968,984 shares. The stock had previously closed at $516.17.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s redesigned Copilot, positioned to compete more directly with Anthropic’s Claude, includes broader AI-agent capabilities and a coding feature powered by GitHub Copilot. The rollout could increase enterprise adoption and strengthen Microsoft’s AI ecosystem. Microsoft just sent a strong message to Anthropic
• Positive Sentiment: Azure has reportedly surpassed $100 billion in annual revenue, reinforcing the case that Microsoft is converting AI demand into meaningful cloud sales. Analysts and commentators argue that the company’s backlog and enterprise AI platform could support further stock gains. Microsoft’s AI Gains Can Push the Stock Higher
• Positive Sentiment: JPMorgan reaffirmed its Buy rating, while William Blair maintained a Buy recommendation based on potentially undervalued Copilot monetization and Microsoft’s expanding enterprise AI opportunity. Oppenheimer also identified Microsoft among software companies that could benefit from renewed sector support. Microsoft Buy Rating Backed by Copilot Monetization
• Neutral Sentiment: Microsoft’s large planned expansion of global data-center capacity highlights the scale of expected AI demand, but investors remain focused on whether Azure revenue and cash flow can justify the substantial capital investment. Microsoft Reportedly Plans a Vast Data Center Expansion
• Negative Sentiment: Microsoft is cutting hundreds of additional jobs only months after its previous workforce reduction. The layoffs may improve efficiency, but their timing highlights ongoing restructuring and potential pressure to control costs as AI investment rises. Microsoft cuts hundreds more jobs
• Negative Sentiment: Senate Democrats are seeking information from Microsoft and other technology companies about tax subsidies for AI and data-center development. Increased political scrutiny could create uncertainty around the cost and regulatory environment for Microsoft’s infrastructure plans. Senator Warren Questions AI Tax Subsidies

Analyst Ratings Changes

A number of research firms have recently weighed in on MSFT. UBS Group initiated coverage on Microsoft in a report on Wednesday, September 23rd. They set a “buy” rating for the company. Piper Sandler upped their price target on shares of Microsoft from $540.00 to $550.00 and gave the company an “overweight” rating in a research note on Tuesday, July 28th. Jefferies Financial Group reaffirmed a “buy” rating on shares of Microsoft in a research report on Monday, September 21st. Royal Bank Of Canada reiterated an “outperform” rating on shares of Microsoft in a research note on Thursday, September 10th. Finally, CLSA reissued an “outperform” rating on shares of Microsoft in a report on Thursday, July 30th. Forty-three equities research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $569.29.

Microsoft Trading Down 1.3%

The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a market capitalization of $3.78 trillion, a price-to-earnings ratio of 28.35, a price-to-earnings-growth ratio of 1.66 and a beta of 1.11. The firm has a fifty day moving average price of $477.93 and a 200-day moving average price of $426.29.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. During the same quarter in the previous year, the firm earned $3.65 earnings per share. Microsoft’s revenue for the quarter was up 17.7% compared to the same quarter last year. As a group, equities analysts anticipate that Microsoft Corporation will post 19.62 EPS for the current year.

Microsoft Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be issued a dividend of $0.98 per share. This is a boost from Microsoft’s previous quarterly dividend of $0.91. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $3.92 dividend on an annualized basis and a dividend yield of 0.8%. Microsoft’s payout ratio is currently 20.27%.

Insider Activity

In other Microsoft news, EVP Takeshi Numoto sold 4,810 shares of the business’s stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the completion of the transaction, the executive vice president directly owned 42,677 shares in the company, valued at $21,188,276.96. The trade was a 10.13% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO Satya Nadella sold 86,525 shares of the company’s stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the sale, the chief executive officer owned 486,763 shares of the company’s stock, valued at $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 143,009 shares of company stock worth $71,420,699. Insiders own 0.03% of the company’s stock.

Hedge Funds Weigh In On Microsoft

A number of institutional investors have recently modified their holdings of MSFT. Bank of America Corp DE bought a new stake in shares of Microsoft during the 2nd quarter worth $27,338,370,000. Auto Owners Insurance Co grew its position in Microsoft by 56,160.8% in the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock valued at $29,073,486,000 after acquiring an additional 60,009,531 shares during the last quarter. Legal & General Group Plc acquired a new position in Microsoft during the second quarter worth about $18,306,443,000. Jupiter Topco LLC acquired a new position in Microsoft during the second quarter worth about $6,928,664,000. Finally, Canada Pension Plan Investment Board bought a new position in shares of Microsoft in the second quarter worth about $5,653,812,000. Institutional investors and hedge funds own 71.13% of the company’s stock.

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft’s productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.