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

Microsoft Corporation (NASDAQ:MSFT) was down 2.4% on Wednesday . The company traded as low as $364.78 and last traded at $365.1210. 43,811,866 shares changed hands during trading, an increase of 21% from the average session volume of 36,244,023 shares. The stock had previously closed at $373.94.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s new 20-year power agreement with Chevron for a Texas AI data center is being viewed as a strategic move to secure the electricity needed for future Azure and AI growth, reinforcing the company’s long-term infrastructure buildout. Article Title
• Positive Sentiment: Several commentary pieces argue Microsoft is being unfairly punished for AI capex and that the company is actually building a wider moat, with bullish notes pointing to a substantial AI revenue run rate and potential upside if spending converts into growth. Article Title
• Positive Sentiment: Microsoft’s education-focused AI report and related product announcements suggest continued enterprise and institutional adoption of its AI tools, supporting the long-term monetization story. Article Title
• Neutral Sentiment: Analyst commentary from Stifel reiterated a Hold rating, saying the Chevron deal highlights power demand for AI data centers but does not materially change the near-term investment case. Article Title
• Negative Sentiment: Microsoft is facing multiple securities class-action alerts tied to alleged investor harm, adding legal uncertainty and sentiment pressure on the shares. Article Title
• Negative Sentiment: A new critique in Nature and Reuters coverage questioned Microsoft’s quantum-computing breakthrough, increasing doubts about a key technology narrative and weighing on investor confidence. Article Title
• Negative Sentiment: More broadly, investors remain worried that Microsoft’s heavy AI/data-center spending is pressuring free cash flow, which has fueled recent volatility in the stock. Article Title

Wall Street Analyst Weigh In

MSFT has been the topic of several research analyst reports. UBS Group restated a “buy” rating on shares of Microsoft in a report on Friday, April 24th. Jefferies Financial Group reaffirmed a “buy” rating on shares of Microsoft in a research note on Monday, May 4th. Wedbush reiterated an “outperform” rating and set a $575.00 price target on shares of Microsoft in a research report on Wednesday, May 13th. Sanford C. Bernstein boosted their price target on shares of Microsoft from $641.00 to $646.00 and gave the company an “outperform” rating in a research note on Thursday, April 30th. Finally, Evercore lowered their price objective on shares of Microsoft from $580.00 to $510.00 and set an “outperform” rating for the company in a research report on Thursday, April 30th. Forty-one 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, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $561.20.

Microsoft Price Performance

The company’s 50-day moving average price is $412.32 and its 200-day moving average price is $423.55. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08. The firm has a market cap of $2.71 trillion, a price-to-earnings ratio of 21.73, a PEG ratio of 1.32 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share for the quarter, topping the consensus estimate of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The firm had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.44 billion. During the same period in the prior year, the firm earned $3.46 EPS. The firm’s revenue for the quarter was up 18.3% on a year-over-year basis. On average, equities research analysts forecast that Microsoft Corporation will post 16.76 EPS for the current year.

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a dividend yield of 1.0%. Microsoft’s dividend payout ratio is currently 21.67%.

Insider Activity

In related news, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction on Monday, June 1st. The stock was 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 in the company, valued at approximately $50,928,792.23. This trade represents a 12.30% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, EVP Takeshi Numoto sold 4,500 shares of the business’s stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $402.84, for a total value of $1,812,780.00. Following the transaction, the executive vice president directly owned 47,468 shares of the company’s stock, valued at $19,122,009.12. The trade was a 8.66% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 23,762 shares of company stock worth $10,508,361. Corporate insiders own 0.03% of the company’s stock.

Hedge Funds Weigh In On Microsoft

A number of institutional investors and hedge funds have recently made changes to their positions in MSFT. Taylor Securities Services Inc. acquired a new position in shares of Microsoft in the fourth quarter valued at approximately $2,616,000. PMG Family Office LLC acquired a new stake in Microsoft during the third quarter worth approximately $828,000. Trifecta Capital Advisors LLC grew its stake in Microsoft by 2.3% in the 3rd quarter. Trifecta Capital Advisors LLC now owns 70,175 shares of the software giant’s stock worth $36,347,000 after acquiring an additional 1,572 shares during the period. TD Waterhouse Canada Inc. grew its stake in Microsoft by 1.0% in the 3rd quarter. TD Waterhouse Canada Inc. now owns 949,901 shares of the software giant’s stock worth $493,860,000 after acquiring an additional 9,700 shares during the period. Finally, Werba Rubin Papier Wealth Management raised its holdings in Microsoft by 15.7% in the 4th quarter. Werba Rubin Papier Wealth Management now owns 12,492 shares of the software giant’s stock valued at $6,041,000 after acquiring an additional 1,698 shares during the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

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).