Microsoft (NASDAQ:MSFT) Stock Price Down 1.1% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT)’s share price dropped 1.1% on Wednesday . The company traded as low as $485.68 and last traded at $487.46. 32,969,719 shares traded hands during mid-day trading, a decline of 13% from the average daily volume of 37,978,242 shares. The stock had previously closed at $492.81.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure growth is driving bullish sentiment. Azure revenue surpassed $100 billion for fiscal 2026, with fourth-quarter growth accelerating to 43%. Total fiscal-year revenue reached $331.8 billion, up 18%, reinforcing the view that Microsoft’s substantial AI infrastructure spending is translating into cloud demand. Microsoft Azure Fiscal 2026 Sales Exceed $100B
• Positive Sentiment: Analysts raised their outlook. Tigress Financial increased its Microsoft price target from $680 to a Street-high $690, citing durable AI and cloud growth. Other commentary also argues that enterprise AI demand and Copilot monetization could support additional gains. Tigress Raises Microsoft Price Target
• Positive Sentiment: Microsoft is prioritizing OpenAI’s flagship model for coding. A CoreAI executive instructed developers to default to OpenAI’s GPT-5.6 Sol in GitHub Copilot projects, signaling deeper integration with OpenAI and a push to improve developer productivity and AI product efficiency. Microsoft AI Executive Memo on OpenAI Model
• Positive Sentiment: New AI infrastructure demand could expand customer relationships. Microsoft was identified as a customer in IREN’s reported $2.8 billion AI contracts, highlighting continued demand for data-center capacity across the AI ecosystem. IREN AI Contracts Including Microsoft
• Neutral Sentiment: Microsoft announced a healthcare AI partnership with Assuta Medical Centers, broadening potential applications for its technology, although the immediate financial impact is unclear. Microsoft and Assuta Medical Centers Partnership
• Negative Sentiment: Investors are taking profits after the rally. Microsoft’s strong earnings beat and accelerated Azure growth have already produced a sharp rebound, increasing concerns that expectations and valuation now discount much of the good news.
• Negative Sentiment: AI spending carries financial and execution risks. Microsoft is among several hyperscalers with roughly $1.09 trillion in future data-center lease commitments, raising scrutiny over capital intensity and long-term returns. AI Data-Center Lease Commitments
• Negative Sentiment: Multiple law firms are promoting a securities-fraud class action related to alleged misrepresentations about Copilot adoption and Azure growth. The August 11 lead-plaintiff deadline adds headline risk, though these notices do not represent a finding of wrongdoing. Microsoft Securities Class Action Notice

Analyst Ratings Changes

Several brokerages recently commented on MSFT. Morgan Stanley reiterated an “overweight” rating on shares of Microsoft in a research report on Thursday, July 30th. The Goldman Sachs Group reaffirmed a “buy” rating and set a $640.00 target price on shares of Microsoft in a research note on Thursday, July 30th. Sanford C. Bernstein upped their target price on shares of Microsoft from $646.00 to $647.00 and gave the stock an “outperform” rating in a report on Thursday, July 30th. HSBC decreased their price target on shares of Microsoft from $593.00 to $571.00 in a research note on Thursday, April 30th. Finally, DA Davidson restated a “buy” rating and set a $550.00 price target on shares of Microsoft in a research report on Thursday, July 30th. Forty-two equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $558.87.

Microsoft Stock Down 1.1%

The business has a 50-day moving average of $400.91 and a 200-day moving average of $405.81. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The stock has a market capitalization of $3.62 trillion, a price-to-earnings ratio of 27.14, a P/E/G ratio of 1.57 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, topping analysts’ consensus estimates of $4.24 by $0.50. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The company had revenue of $90.01 billion for the quarter, compared to analysts’ expectations of $87.62 billion. During the same period in the prior year, the firm earned $3.65 earnings per share. The firm’s revenue was up 17.7% compared to the same quarter last year. On average, sell-side analysts expect that Microsoft Corporation will post 19.56 EPS for the current year.

Microsoft Announces Dividend

The company also recently disclosed 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 0.7%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is presently 20.27%.

Insiders Place Their Bets

In other news, EVP Amy Coleman sold 1,262 shares of the firm’s 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 transaction, the executive vice president directly owned 46,003 shares in the company, valued at approximately $18,922,874.02. This trade represents a 2.67% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 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 transaction of $7,145,345.00. Following the completion of the transaction, the chief executive officer owned 110,477 shares in the company, valued at approximately $50,928,792.23. This represents a 12.30% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 23,762 shares of company stock valued at $10,508,361 in the last ninety days. Insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

Hedge funds have recently added to or reduced their stakes in the company. WFA Asset Management Corp lifted its holdings in shares of Microsoft by 27.0% during the 1st quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant’s stock worth $427,000 after acquiring an additional 216 shares during the period. Ironwood Wealth Management LLC. raised its stake in Microsoft by 0.3% during the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant’s stock worth $5,658,000 after purchasing an additional 38 shares during the period. Discipline Wealth Solutions LLC boosted its holdings in shares of Microsoft by 410.4% in the 3rd quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant’s stock valued at $1,144,000 after purchasing an additional 2,138 shares during the last quarter. Wealth Group Ltd. grew its stake in shares of Microsoft by 1.2% during the 4th quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant’s stock valued at $1,000,000 after buying an additional 28 shares during the period. Finally, Eagle Capital Management LLC increased its holdings in shares of Microsoft by 0.4% during the 4th quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant’s stock worth $9,735,000 after buying an additional 96 shares during the last quarter. 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).