Microsoft (NASDAQ:MSFT) Trading Down 2.4% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) shares fell 2.4% during mid-day trading on Wednesday . The stock traded as low as $457.17 and last traded at $459.38. 28,032,229 shares changed hands during trading, an increase of 20% from the average session volume of 23,318,965 shares. The stock had previously closed at $470.67.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Morgan Stanley and other analysts say MSFT looks undervalued given strong corporate demand for its AI offerings — a buy/valuation upside argument that supports a longer‑term bull case. Microsoft’s stock may be an AI winner — but it’s not acting like one
• Positive Sentiment: Goldman Sachs and other firms maintain bullish views (Buy/initiations and CIO‑survey takeaways) pointing to Azure/AI revenue tailwinds — a supportive analyst backdrop for valuation recovery. Goldman Sachs Software Stock Picks 2026
• Positive Sentiment: Product/market expansion: Microsoft is pushing agentic AI and Copilot Checkout to embed AI into retail workflows (low‑conflict approach that aims to expand Copilot adoption across enterprise customers). This supports TAM expansion if adoption follows. Microsoft Wants to Power Retail Without Competing With It
• Neutral Sentiment: Community‑First data‑center plan: Microsoft pledged to pay higher local utility costs and mitigate water/ tax impacts to win approvals — reduces political/regulatory risk but may increase operating/capital costs; net impact depends on scale and execution. Microsoft launches data center initiative to limit power costs, water use
• Negative Sentiment: Rising AI vendor spend: reports that Microsoft will spend roughly $500M/year on Anthropic models have fueled concerns that MSFT is increasing external AI costs — some commentators call this a costly pivot that could pressure margins if it continues. Microsoft Spending on Anthropic Approaches $500 Million a Year
• Negative Sentiment: Market rotation & technical selling: MSFT has slid as the AI trade cools, Alphabet’s rally and broader tech re‑rating/interest‑rate uncertainty have increased selling pressure and pushed MSFT toward multi‑month lows. Microsoft Stock Hits Six-Month Low

Wall Street Analyst Weigh In

Several research analysts have recently commented on the company. Wall Street Zen upgraded Microsoft from a “hold” rating to a “buy” rating in a report on Saturday. UBS Group reissued a “buy” rating and set a $650.00 price objective on shares of Microsoft in a research report on Thursday, October 30th. Morgan Stanley boosted their price objective on shares of Microsoft from $625.00 to $650.00 and gave the company an “overweight” rating in a report on Thursday, October 30th. Stifel Nicolaus set a $640.00 target price on shares of Microsoft in a research note on Thursday, October 30th. Finally, Wells Fargo & Company reduced their price target on shares of Microsoft from $700.00 to $665.00 and set an “overweight” rating on the stock in a research note on Thursday, January 8th. Three analysts have rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating and four have given a Hold rating to the company. According to MarketBeat, the company has an average rating of “Moderate Buy” and an average price target of $630.37.

Microsoft Stock Performance

The firm has a market capitalization of $3.41 trillion, a price-to-earnings ratio of 32.67, a PEG ratio of 1.79 and a beta of 1.07. The firm has a 50 day moving average price of $486.47 and a 200-day moving average price of $503.47. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, October 29th. The software giant reported $4.13 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.65 by $0.48. The company had revenue of $77.67 billion for the quarter, compared to analyst estimates of $75.49 billion. Microsoft had a return on equity of 32.45% and a net margin of 35.71%.Microsoft’s revenue for the quarter was up 18.4% compared to the same quarter last year. During the same quarter last year, the company earned $3.30 EPS. As a group, sell-side analysts expect that Microsoft Corporation will post 13.08 earnings per share for the current fiscal year.

Microsoft Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, March 12th. Shareholders of record on Thursday, February 19th will be paid a $0.91 dividend. The ex-dividend date is Thursday, February 19th. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. Microsoft’s dividend payout ratio (DPR) is currently 25.89%.

Insider Transactions at Microsoft

In other news, EVP Takeshi Numoto sold 2,850 shares of the stock in a transaction dated Thursday, December 4th. The stock was sold at an average price of $478.72, for a total value of $1,364,352.00. Following the transaction, the executive vice president owned 55,782 shares in the company, valued at approximately $26,703,959.04. This 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, insider Bradford L. Smith sold 38,500 shares of the business’s stock in a transaction that occurred on Monday, November 3rd. The stock was sold at an average price of $518.64, for a total value of $19,967,640.00. Following the sale, the insider owned 461,597 shares of the company’s stock, valued at approximately $239,402,668.08. The trade was a 7.70% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 54,100 shares of company stock valued at $27,598,872. 0.03% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Microsoft

A number of institutional investors and hedge funds have recently added to or reduced their stakes in MSFT. Longfellow Investment Management Co. LLC raised its holdings 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 valued at $29,000 after buying an additional 20 shares during the last quarter. Bulwark Capital Corp purchased a new stake in Microsoft during the 2nd quarter valued at approximately $32,000. Westend Capital Management LLC raised its stake in Microsoft by 386.7% during the 2nd quarter. Westend Capital Management LLC now owns 73 shares of the software giant’s stock valued at $36,000 after acquiring an additional 58 shares during the last quarter. Bayforest Capital Ltd acquired a new stake in Microsoft during the 3rd quarter worth approximately $38,000. Finally, LSV Asset Management purchased a new position in shares of Microsoft in the 4th quarter valued at approximately $44,000. 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).