Microsoft (NASDAQ:MSFT) Stock Price Down 2.5% – Should You Sell?

Shares of Microsoft Corporation (NASDAQ:MSFT) dropped 2.5% during mid-day trading on Friday . The company traded as low as $356.51 and last traded at $356.77. Approximately 37,573,448 shares were traded during trading, an increase of 4% from the average daily volume of 36,256,055 shares. The stock had previously closed at $365.97.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Wall Street bulls point to upside: several analysts tell investors the pullback creates a large rebound opportunity for MSFT, arguing the sell-off may be overdone and upside remains if AI revenue ramps as expected. Wall Street Says Microsoft Stock Has 89% Rebound Potential
• Positive Sentiment: Options flow shows some investors are positioning for a recovery — unusual call buying suggests pockets of speculative conviction that MSFT will rally from current levels. Investors are Piling into Microsoft Call Options – Unusual MSFT Options Activity Today
• Neutral Sentiment: Infrastructure support expands in Texas: Crusoe announced a new 900MW AI campus in Abilene that will support Microsoft’s large-scale AI workloads — this eases short-term compute capacity constraints but also highlights growing third‑party infrastructure activity around Microsoft. Crusoe Announces New 900 MW AI Factory Campus in Abilene, Texas to Support Microsoft AI Infrastructure
• Neutral Sentiment: LinkedIn ad momentum: Microsoft’s LinkedIn Marketing Solutions is showing ad growth, which provides steady, non‑cloud revenue tailwinds even as cloud/AI narratives dominate headlines. Microsoft Benefits From LinkedIn Ad Growth: More Upside Ahead?
• Negative Sentiment: Partnership friction with OpenAI: reporting says Microsoft is taking on a Texas data‑center project OpenAI declined and that the two firms are no longer tightly aligned — investors view a weaker OpenAI relationship as a strategic headwind for Microsoft’s AI lead and product leverage. Microsoft is picking up a Texas data center project OpenAI didn’t want
• Negative Sentiment: Heavy AI spending and capital allocation concerns: commentators highlight Microsoft’s very large AI capex run rate (reported coverage cites roughly $30B/quarter), fueling worry that near‑term returns won’t keep pace with spending and pressuring sentiment. Microsoft Is Down 24% This Year While Spending $30B a Quarter on AI
• Negative Sentiment: Operational caution: reports of hiring freezes in major cloud and sales groups plus lingering concerns about Copilot adoption and weaker near‑term guidance have amplified downside pressure and driven analyst downgrades/target cuts. Microsoft freezes hiring in major cloud, sales groups, The Information reports

Analyst Ratings Changes

Several brokerages recently weighed in on MSFT. Rothschild & Co Redburn set a $450.00 target price on Microsoft in a research note on Wednesday, January 21st. Robert W. Baird set a $540.00 price target on Microsoft and gave the company an “outperform” rating in a research note on Thursday, January 29th. Mizuho lowered their price target on Microsoft from $640.00 to $620.00 and set an “outperform” rating for the company in a report on Wednesday, January 21st. Bank of America assumed coverage on Microsoft in a research note on Tuesday. They set a “buy” rating and a $500.00 price target on the stock. Finally, HSBC decreased their price objective on shares of Microsoft from $667.00 to $588.00 and set a “buy” rating for the company in a research report on Thursday, January 29th. Two research analysts have rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $588.97.

Microsoft Stock Down 2.5%

The company has a current ratio of 1.39, a quick ratio of 1.38 and a debt-to-equity ratio of 0.09. The business’s 50-day simple moving average is $411.42 and its 200-day simple moving average is $468.63. The company has a market capitalization of $2.65 trillion, a PE ratio of 22.31, a price-to-earnings-growth ratio of 1.41 and a beta of 1.10.

Microsoft (NASDAQ:MSFT) last released 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. Microsoft had a net margin of 39.04% and a return on equity of 32.34%. The business had revenue of $81.27 billion for the quarter, compared to the consensus estimate of $80.28 billion. During the same period in the prior year, the firm earned $3.23 EPS. The business’s revenue for the quarter was up 16.7% on a year-over-year basis. As a group, equities research analysts anticipate that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. This represents a $3.64 annualized dividend and a yield of 1.0%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft’s dividend payout ratio (DPR) is currently 22.76%.

Insider Transactions at Microsoft

In related news, Director John W. Stanton purchased 5,000 shares of Microsoft stock in a transaction that occurred on Wednesday, February 18th. The stock was bought at an average cost of $397.35 per share, for a total transaction of $1,986,750.00. Following the completion of the transaction, the director owned 83,905 shares in the company, valued at $33,339,651.75. The trade was a 6.34% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through this link. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business’s stock in a transaction that occurred on Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the completion of the transaction, the executive vice president directly owned 137,933 shares of the company’s stock, valued at $56,486,322.16. The trade was a 8.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

Hedge funds and other institutional investors have recently made changes to their positions in the company. J. Derek Lewis & Associates Inc. acquired a new stake in Microsoft during the fourth quarter valued at $7,883,000. Purpose Unlimited Inc. acquired a new position in shares of Microsoft in the fourth quarter worth about $32,815,000. Carter Financial LLC purchased a new stake in shares of Microsoft during the 4th quarter worth about $307,000. Cornerstone Planning LLC acquired a new stake in shares of Microsoft during the 4th quarter valued at about $6,474,000. Finally, AMG Asset Management Group Inc. acquired a new stake in shares of Microsoft during the 4th quarter valued at about $1,701,000. Institutional investors and hedge funds 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).