Microsoft (NASDAQ:MSFT) Shares Down 1.5% – Here’s What Happened

Microsoft Corporation (NASDAQ:MSFT)’s share price traded down 1.5% on Tuesday . The company traded as low as $390.69 and last traded at $393.83. 30,454,649 shares were traded during trading, a decline of 15% from the average session volume of 35,727,098 shares. The stock had previously closed at $399.76.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Some commentary argues Microsoft’s AI and cloud businesses still look undervalued, with analysts and investors pointing to the company’s long-term earnings power and a potentially attractive valuation reset. Article Title
• Positive Sentiment: Microsoft continues to push new AI and developer tools, including a new coding model, which could strengthen its competitive position in enterprise AI over time. Article Title
• Neutral Sentiment: Microsoft also unveiled new Surface devices and expanded marketplace offerings, but these product updates appear less likely to move the stock than the company’s AI and cloud narrative. Article Title
• Negative Sentiment: Multiple law firms announced class action or securities fraud investigations tied to Microsoft’s disclosures around Azure growth, AI spending, and alleged investor harm, increasing legal overhang on the shares. Article Title
• Negative Sentiment: Reports that Microsoft may restructure or spin off parts of Xbox, including possible studio closures, added to concerns about profitability and execution within the gaming division. Article Title
• Negative Sentiment: Investor commentary has also focused on heavy AI capital expenditures and softer Azure growth, reinforcing the market’s concern that spending is rising faster than near-term returns. Article Title

Analyst Upgrades and Downgrades

MSFT has been the subject of several recent analyst reports. Jefferies Financial Group reissued a “buy” rating on shares of Microsoft in a report on Monday, May 4th. Tigress Financial raised their price target on Microsoft from $595.00 to $680.00 and gave the company a “buy” rating in a report on Wednesday, May 6th. President Capital raised their price target on Microsoft from $500.00 to $520.00 and gave the company a “buy” rating in a report on Thursday, April 30th. Rothschild & Co Redburn reduced their price target on Microsoft from $450.00 to $400.00 and set a “neutral” rating for the company in a report on Thursday, April 23rd. Finally, Raymond James Financial cut Microsoft from a “market perform” rating to a “market perform” rating in a report on Tuesday, May 5th. Forty-one equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $561.20.

Microsoft Stock Performance

The company has a market capitalization of $2.92 trillion, a price-to-earnings ratio of 23.43, a PEG ratio of 1.41 and a beta of 1.11. The stock has a fifty day moving average price of $411.60 and a two-hundred day moving average price of $428.09. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping analysts’ consensus estimates of $4.06 by $0.21. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company had revenue of $82.89 billion during the quarter, compared to analysts’ expectations of $81.44 billion. During the same period in the previous year, the firm posted $3.46 earnings per share. The business’s revenue for the quarter was up 18.3% compared to the same quarter last year. As a group, analysts forecast that Microsoft Corporation will post 16.76 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a $0.91 dividend. This represents a $3.64 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s payout ratio is 21.67%.

Insider Transactions at Microsoft

In other news, EVP Amy Coleman sold 1,262 shares of Microsoft stock in a transaction on Thursday, May 14th. The stock was sold at an average price of $411.34, for a total value of $519,111.08. Following the completion of the sale, the executive vice president 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. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction 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 sale, the chief executive officer directly owned 110,477 shares of the company’s stock, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 23,762 shares of company stock valued at $10,508,361 over the last three months. 0.03% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Microsoft

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