Microsoft (NASDAQ:MSFT) Trading Down 2% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT)’s stock price fell 2% on Tuesday . The company traded as low as $398.48 and last traded at $403.41. 34,143,595 shares traded hands during mid-day trading, a decline of 5% from the average session volume of 35,803,840 shares. The stock had previously closed at $411.74.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: NHS England is rolling out Microsoft 365 Copilot to 505,000 clinicians and staff, a major real-world healthcare AI deployment that could strengthen Microsoft’s Copilot momentum and cloud adoption. Article Title
• Positive Sentiment: BNP and other market commentary highlighted rising AI infrastructure demand, suggesting Microsoft Azure could benefit from stronger cloud spending tied to the AI buildout. Article Title
• Positive Sentiment: Analysts and commentary continue to frame Microsoft as a leading AI beneficiary, with some saying its AI strategy, ecosystem momentum, and in-house model ambitions support longer-term upside. Article Title
• Positive Sentiment: Reports that Microsoft is distancing itself from OpenAI and building more AI infrastructure in-house were portrayed as a strategic positive, reducing dependence on a single partner and giving Microsoft more control over AI economics. Article Title
• Neutral Sentiment: Microsoft’s role in AI remains a major investor focus, with multiple articles discussing its position in “agentic AI,” its cloud growth, and whether its valuation can keep up with AI expectations. Article Title
• Negative Sentiment: Microsoft said hackers breached some of its open-source GitHub projects and injected password-stealing malware, which raises security concerns and could weigh on sentiment around the company’s developer ecosystem. Article Title
• Negative Sentiment: Several items note that Microsoft stock has been under pressure recently despite positive AI news, suggesting investors are still cautious about valuation, AI execution, and the pace of near-term monetization. Article Title

Analyst Ratings Changes

A number of research firms recently weighed in on MSFT. Jefferies Financial Group reaffirmed a “buy” rating on shares of Microsoft in a research note on Monday, May 4th. Cantor Fitzgerald reissued an “overweight” rating and set a $502.00 price target on shares of Microsoft in a research report on Thursday, June 4th. Oppenheimer reissued an “outperform” rating and set a $515.00 price target (down from $630.00) on shares of Microsoft in a research report on Monday, April 27th. Piper Sandler reissued an “overweight” rating on shares of Microsoft in a research report on Tuesday, May 26th. Finally, Dbs Bank decreased their price target on shares of Microsoft from $678.00 to $573.00 in a research report on Thursday, May 7th. Forty-one analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $561.20.

Microsoft Stock Down 2.0%

The stock has a market capitalization of $3.00 trillion, a PE ratio of 24.01, a price-to-earnings-growth ratio of 1.50 and a beta of 1.11. The company has a current ratio of 1.28, a quick ratio of 1.27 and a debt-to-equity ratio of 0.08. The company’s 50-day moving average is $408.54 and its 200 day moving average is $430.96.

Microsoft (NASDAQ:MSFT) last announced its quarterly earnings data on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, beating the consensus estimate of $4.06 by $0.21. The firm had revenue of $82.89 billion during the quarter, compared to analyst estimates of $81.44 billion. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. Microsoft’s revenue was up 18.3% on a year-over-year basis. During the same period last year, the firm posted $3.46 EPS. As a group, analysts anticipate that Microsoft Corporation will post 16.76 EPS for the current year.

Insider Activity at Microsoft

In related news, CEO Judson Althoff sold 15,500 shares of the stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $460.99, for a total value of $7,145,345.00. Following the completion of the transaction, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of the stock in a transaction that occurred on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total transaction of $519,111.08. Following the completion of the transaction, the executive vice president directly owned 46,003 shares of the company’s stock, valued at $18,922,874.02. The trade was a 2.67% 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.

Hedge Funds Weigh In On Microsoft

Several hedge funds and other institutional investors have recently bought and sold shares of the business. Rathbones Group PLC increased its holdings in Microsoft by 2.9% in the 1st quarter. Rathbones Group PLC now owns 3,613,937 shares of the software giant’s stock worth $1,337,770,000 after buying an additional 101,616 shares during the period. Pine Valley Investments Ltd Liability Co increased its holdings in Microsoft by 2.6% in the 1st quarter. Pine Valley Investments Ltd Liability Co now owns 107,306 shares of the software giant’s stock worth $39,721,000 after buying an additional 2,689 shares during the period. Positano Wealth Management Ltd grew its stake in shares of Microsoft by 122.4% during the 1st quarter. Positano Wealth Management Ltd now owns 44,601 shares of the software giant’s stock worth $16,510,000 after purchasing an additional 24,550 shares during the period. Farmers National Bank grew its stake in shares of Microsoft by 7.2% during the 1st quarter. Farmers National Bank now owns 56,251 shares of the software giant’s stock worth $20,822,000 after purchasing an additional 3,796 shares during the period. Finally, Evansbrook LLC grew its stake in shares of Microsoft by 1.3% during the 1st quarter. Evansbrook LLC now owns 6,060 shares of the software giant’s stock worth $2,243,000 after purchasing an additional 77 shares during the period. Institutional investors and hedge funds own 71.13% of the company’s stock.

About Microsoft

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).