Microsoft (NASDAQ:MSFT) Shares Down 1.1% – What’s Next?

Microsoft Corporation (NASDAQ:MSFT)’s share price traded down 1.1% during trading on Tuesday . The company traded as low as $394.53 and last traded at $396.86. 31,873,937 shares changed hands during trading, a decline of 17% from the average session volume of 38,453,379 shares. The stock had previously closed at $401.32.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft locked in a long‑duration revenue arrangement with OpenAI (20% share extended through 2032), creating a sizeable, recurring cash‑flow channel tied to the AI leader — a clear structural upside for MSFT’s AI monetization thesis. Read More.
• Positive Sentiment: Insider buying: director John W. Stanton purchased 5,000 shares (~$2M), a behavioral vote of confidence that can help stabilize sentiment after recent weakness. Read More.
• Positive Sentiment: Wall Street / institutional interest: Morgan Stanley and other firms highlight MSFT as under‑owned and many hedge funds/institutions have added to positions or maintained positive ratings — supports potential inflows if risk appetite returns. Read More.
• Positive Sentiment: ESG/operational: Microsoft commits to continue matching its electricity needs with renewable purchases as it scales data‑centers, lowering regulatory/ESG risk for long‑term investors. Read More.
• Neutral Sentiment: Growth vs. capex trade: Microsoft says it’s on pace to invest ~$50B in AI across the Global South by 2030 — a large, long‑term market expansion but one that requires heavy upfront capex and multi‑year execution. Read More.
• Neutral Sentiment: Partnerships/enterprise traction: CrowdStrike’s Falcon is now available on Microsoft Marketplace, which increases enterprise stickiness and could drive incremental marketplace revenue over time (limited immediate impact). Read More.
• Neutral Sentiment: Industry moves (indirect effect): NVIDIA and Meta deepen their AI alliance and huge capex plans — this underscores relentless demand for compute but also signals competitors (Meta) spending to build infrastructure that could reduce future cloud demand. Implication for MSFT is mixed. Read More.
• Negative Sentiment: Near‑term selling and rotation: several pieces point to investor dumping and downgrades after a strong earnings beat — concerns that MSFT’s massive AI infrastructure spending will pressure near‑term margins have triggered profit‑taking and volatility. Read More.
• Negative Sentiment: Product/security jitters and sector pressure: reports of an Office/Copilot bug and research on “recommendation poisoning,” together with tech‑sector downgrades, amplify short‑term adoption and regulatory risk narratives. Read More. Read More.

Analyst Upgrades and Downgrades

A number of research analysts have issued reports on the company. Citigroup decreased their target price on Microsoft from $660.00 to $635.00 and set a “buy” rating on the stock in a research report on Thursday, January 29th. Bank of America decreased their price target on shares of Microsoft from $640.00 to $520.00 and set a “buy” rating on the stock in a report on Monday, January 26th. DZ Bank restated a “buy” rating on shares of Microsoft in a research report on Thursday, January 29th. JPMorgan Chase & Co. decreased their target price on shares of Microsoft from $575.00 to $550.00 and set an “overweight” rating on the stock in a research note on Thursday, January 29th. Finally, The Goldman Sachs Group reiterated a “buy” rating on shares of Microsoft in a research note on Thursday, February 12th. Two research analysts have rated the stock with a Strong Buy rating, thirty-nine have assigned a Buy rating and four have given a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $591.95.

Microsoft Trading Down 0.3%

The company has a quick ratio of 1.38, a current ratio of 1.39 and a debt-to-equity ratio of 0.09. The company has a market cap of $2.96 trillion, a price-to-earnings ratio of 24.92, a PEG ratio of 1.56 and a beta of 1.08. The firm has a 50 day moving average price of $453.76 and a two-hundred day moving average price of $489.29.

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

Microsoft Dividend Announcement

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

Insider Activity at Microsoft

In other Microsoft news, CEO Judson Althoff sold 12,750 shares of Microsoft stock in a transaction that occurred 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 completion of the sale, the chief executive officer directly owned 129,349 shares in the company, valued at approximately $63,577,620.48. The trade was a 8.97% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director John W. Stanton purchased 5,000 shares of the company’s stock in a transaction on Wednesday, February 18th. The stock was acquired at an average cost of $397.35 per share, for a total transaction of $1,986,750.00. Following the completion of the purchase, the director owned 83,905 shares of the company’s stock, valued at approximately $33,339,651.75. This trade represents a 6.34% increase in their position. The SEC filing for this purchase provides additional information. 0.03% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the business. Vanguard Group Inc. grew its stake in shares of Microsoft by 2.3% in the 4th quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after acquiring an additional 15,955,898 shares in the last quarter. State Street Corp boosted its holdings in Microsoft by 2.1% during the fourth quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock worth $148,060,557,000 after purchasing an additional 6,388,930 shares during the last quarter. Geode Capital Management LLC grew its position in Microsoft by 1.1% in the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock worth $88,056,019,000 after purchasing an additional 1,911,142 shares in the last quarter. Morgan Stanley increased its stake in Microsoft by 0.8% in the 4th quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock valued at $58,624,690,000 after buying an additional 980,439 shares during the last quarter. Finally, Norges Bank bought a new position in shares of Microsoft during the 4th quarter worth approximately $50,664,631,000. 71.13% of the stock is owned by institutional investors.

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).