Microsoft (NASDAQ:MSFT) Shares Down 1.8% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT)’s share price was down 1.8% during mid-day trading on Wednesday. The stock traded as low as $532.54 and last traded at $533.69. 21,463,922 shares changed hands during trading, a decline of 37% from the average daily volume of 34,150,727 shares. The stock had previously closed at $543.45.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Maia 300 strengthens Microsoft’s AI infrastructure strategy. Microsoft introduced its largest in-house AI chip rollout, with plans for multi-gigawatt deployment across Azure data centers. The chip could improve inference economics, reduce reliance on Nvidia and AMD, and provide greater control over AI capacity and margins. What Could Microsoft Gain From Its Maia 300 AI Chip Rollout?
• Positive Sentiment: Large data-center commitments point to sustained Azure and AI demand. Reports that Microsoft signed more than $130 billion in data-center leases highlight the scale of expected AI workloads and could support long-term Azure growth, although the commitments also increase near-term capital requirements. Microsoft Reports $130 Billion in Data Center Leases
• Positive Sentiment: Analyst sentiment remains broadly constructive. Barclays raised its Microsoft price target to $600 from $512, citing the potential for stronger differentiation in software and upcoming fiscal first-quarter results. Microsoft Price Target Raised by Barclays
• Neutral Sentiment: Microsoft is reportedly seeking at least 20% cost reductions in Azure. The effort could improve efficiency and offset AI infrastructure expenses, but it also suggests management is under pressure to control rapidly rising costs. Microsoft Weighs 20% Cost Cuts in Azure
• Negative Sentiment: Hot inflation data renewed fears of higher interest rates. AI shares broadly sold off, wiping out roughly $80 billion in market value. Higher borrowing costs are particularly concerning for less-profitable AI companies and are weighing on investor risk appetite, even though Microsoft is viewed as financially stronger than many peers. AI Shares Tumble as Inflation Fuels Rate Fears
• Negative Sentiment: Security concerns and analyst downgrades added pressure. Microsoft issued patches for a large number of vulnerabilities, while Phillip Securities cut its rating from “moderate buy” to “hold.” These developments reinforce near-term caution after the stock’s strong run.

Wall Street Analysts Forecast Growth

MSFT has been the subject of a number of research analyst reports. Stifel Nicolaus raised Microsoft from a “hold” rating to a “buy” rating and increased their price target for the company from $530.00 to $575.00 in a research report on Tuesday, September 22nd. BNP Paribas Exane downgraded shares of Microsoft from a “strong-buy” rating to a “hold” rating in a report on Monday, October 5th. JPMorgan Chase & Co. restated a “buy” rating on shares of Microsoft in a research note on Monday, September 28th. Mizuho decreased their target price on shares of Microsoft from $515.00 to $490.00 and set an “outperform” rating on the stock in a report on Wednesday, July 15th. Finally, UBS Group cut shares of Microsoft from a “buy” rating to a “market perform” rating in a research note on Monday, October 5th. Forty-one analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $581.80.

Microsoft Stock Performance

The stock has a market cap of $3.96 trillion, a PE ratio of 29.72, a price-to-earnings-growth ratio of 1.74 and a beta of 1.10. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22. The business has a 50 day moving average price of $503.23 and a two-hundred day moving average price of $437.50.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings data on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The company’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same period in the prior year, the firm posted $3.65 earnings per share. As a group, equities research analysts forecast that Microsoft Corporation will post 19.65 EPS for the current fiscal year.

Microsoft Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be given a $0.98 dividend. The ex-dividend date of this dividend is Thursday, November 19th. This represents a $3.92 annualized dividend and a dividend yield of 0.7%. This is an increase from Microsoft’s previous quarterly dividend of $0.91. Microsoft’s dividend payout ratio is currently 20.27%.

Insider Buying and Selling at Microsoft

In other news, EVP Takeshi Numoto sold 4,810 shares of the business’s stock in a transaction 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 sale, the executive vice president owned 42,677 shares in the company, valued at approximately $21,188,276.96. The trade was a 10.13% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, EVP Amy Hood sold 41,674 shares of the company’s stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $498.27, for a total transaction of $20,764,903.98. Following the completion of the sale, the executive vice president owned 533,624 shares in the company, valued at approximately $265,888,830.48. This trade represents a 7.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 143,009 shares of company stock worth $71,420,699. Corporate insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Bank of America Corp DE purchased a new position in shares of Microsoft in the second quarter worth $27,338,370,000. Auto Owners Insurance Co lifted its holdings in shares of Microsoft by 56,160.8% during 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 purchasing an additional 60,009,531 shares in the last quarter. Legal & General Group Plc bought a new position in shares of Microsoft during the second quarter valued at $18,306,443,000. Jupiter Topco LLC purchased a new stake in shares of Microsoft during the second quarter valued at $6,928,664,000. Finally, Canada Pension Plan Investment Board purchased a new stake in shares of Microsoft during the second quarter valued at $5,653,812,000. Institutional investors own 71.13% of the company’s stock.

Microsoft Company Profile

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.