Microsoft (NASDAQ:MSFT) Stock Falls 1.3% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) traded down 1.3% during mid-day trading on Monday. The company traded as low as $502.22 and last traded at $509.22. 19,539,754 shares changed hands during trading, a decline of 44% from the average session volume of 34,968,984 shares. The stock had previously closed at $516.17.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s redesigned Copilot, positioned to compete more directly with Anthropic’s Claude, includes broader AI-agent capabilities and a coding feature powered by GitHub Copilot. The rollout could increase enterprise adoption and strengthen Microsoft’s AI ecosystem. Microsoft just sent a strong message to Anthropic
• Positive Sentiment: Azure has reportedly surpassed $100 billion in annual revenue, reinforcing the case that Microsoft is converting AI demand into meaningful cloud sales. Analysts and commentators argue that the company’s backlog and enterprise AI platform could support further stock gains. Microsoft’s AI Gains Can Push the Stock Higher
• Positive Sentiment: JPMorgan reaffirmed its Buy rating, while William Blair maintained a Buy recommendation based on potentially undervalued Copilot monetization and Microsoft’s expanding enterprise AI opportunity. Oppenheimer also identified Microsoft among software companies that could benefit from renewed sector support. Microsoft Buy Rating Backed by Copilot Monetization
• Neutral Sentiment: Microsoft’s large planned expansion of global data-center capacity highlights the scale of expected AI demand, but investors remain focused on whether Azure revenue and cash flow can justify the substantial capital investment. Microsoft Reportedly Plans a Vast Data Center Expansion
• Negative Sentiment: Microsoft is cutting hundreds of additional jobs only months after its previous workforce reduction. The layoffs may improve efficiency, but their timing highlights ongoing restructuring and potential pressure to control costs as AI investment rises. Microsoft cuts hundreds more jobs
• Negative Sentiment: Senate Democrats are seeking information from Microsoft and other technology companies about tax subsidies for AI and data-center development. Increased political scrutiny could create uncertainty around the cost and regulatory environment for Microsoft’s infrastructure plans. Senator Warren Questions AI Tax Subsidies

Wall Street Analysts Forecast Growth

A number of research analysts recently commented on MSFT shares. Piper Sandler increased their price target on Microsoft from $540.00 to $550.00 and gave the company an “overweight” rating in a report on Tuesday, July 28th. Stifel Nicolaus raised shares of Microsoft from a “hold” rating to a “buy” rating and raised their price target for the stock from $530.00 to $575.00 in a research report on Tuesday, September 22nd. Royal Bank Of Canada restated an “outperform” rating on shares of Microsoft in a research note on Thursday, September 10th. JPMorgan Chase & Co. reaffirmed a “buy” rating on shares of Microsoft in a report on Monday. Finally, Benchmark reiterated a “buy” rating on shares of Microsoft in a research note on Friday, July 24th. Forty-three equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $569.29.

Microsoft Trading Down 1.3%

The company has a current ratio of 1.23, a quick ratio of 1.22 and a debt-to-equity ratio of 0.07. The company has a market cap of $3.78 trillion, a price-to-earnings ratio of 28.35, a price-to-earnings-growth ratio of 1.66 and a beta of 1.11. The firm has a 50-day moving average price of $477.93 and a 200 day moving average price of $426.29.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.24 by $0.50. The business had revenue of $90.01 billion for the quarter, compared to analyst estimates of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.The business’s revenue was up 17.7% compared to the same quarter last year. During the same period in the prior year, the company posted $3.65 EPS. As a group, sell-side analysts forecast that Microsoft Corporation will post 19.62 EPS for the current year.

Microsoft Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be given a $0.98 dividend. This represents a $3.92 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date is Thursday, November 19th. This is an increase from Microsoft’s previous quarterly dividend of $0.91. Microsoft’s payout ratio is 20.27%.

Insider Buying and Selling at Microsoft

In related news, CEO Judson Althoff sold 10,000 shares of the stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the sale, the chief executive officer owned 100,447 shares in the company, valued at $49,007,086.83. This represents a 9.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the transaction, the chief executive officer owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 143,009 shares of company stock valued at $71,420,699. Corporate insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

Several hedge funds have recently bought and sold shares of MSFT. Box Hill Private Wealth LLC increased its position in Microsoft by 0.5% during the second quarter. Box Hill Private Wealth LLC now owns 4,272 shares of the software giant’s stock worth $1,593,000 after buying an additional 21 shares during the last quarter. Partners in Financial Planning lifted its holdings in Microsoft by 0.9% during the 4th quarter. Partners in Financial Planning now owns 2,593 shares of the software giant’s stock valued at $1,254,000 after purchasing an additional 24 shares during the last quarter. FWG Holdings LLC lifted its stake in shares of Microsoft by 0.3% during the 4th quarter. FWG Holdings LLC now owns 8,368 shares of the software giant’s stock worth $4,047,000 after buying an additional 24 shares during the last quarter. Strategic Wealth Advisors LLC boosted its holdings in shares of Microsoft by 1.7% during the second quarter. Strategic Wealth Advisors LLC now owns 1,473 shares of the software giant’s stock worth $549,000 after acquiring an additional 24 shares during the period. Finally, Friedenthal Financial grew its position in shares of Microsoft by 6.2% in the first quarter. Friedenthal Financial now owns 431 shares of the software giant’s stock valued at $160,000 after purchasing an additional 25 shares during the last quarter. 71.13% of the stock is currently owned by institutional investors.

About Microsoft

Microsoft Corporation is a global technology company that develops software, cloud services, devices, gaming products and business solutions. Founded in 1975 by Bill Gates and Paul Allen, the company is best known for the Windows operating system and Microsoft Office productivity software. Microsoft is headquartered in Redmond, Washington, and serves consumers, businesses, governments and educational institutions worldwide.

Microsoft’s productivity and business offerings include Microsoft 365 applications such as Word, Excel, PowerPoint and Outlook, along with collaboration tools including Teams.