Microsoft (NASDAQ:MSFT) Shares Down 10% After Analyst Downgrade

Shares of Microsoft Corporation (NASDAQ:MSFT) traded down 10% on Thursday after Scotiabank lowered their price target on the stock from $650.00 to $600.00. Scotiabank currently has a sector outperform rating on the stock. Microsoft traded as low as $421.02 and last traded at $433.50. 127,837,789 shares changed hands during mid-day trading, an increase of 289% from the average session volume of 32,841,941 shares. The stock had previously closed at $481.63.

Other research analysts also recently issued research reports about the stock. Robert W. Baird set a $540.00 target price on shares of Microsoft and gave the company an “outperform” rating in a research report on Thursday. Raymond James Financial lowered their price target on shares of Microsoft from $630.00 to $600.00 and set an “outperform” rating on the stock in a report on Thursday, October 30th. HSBC upped their price target on shares of Microsoft from $643.00 to $648.00 in a research note on Monday, October 27th. Cantor Fitzgerald reiterated an “overweight” rating and set a $590.00 target price on shares of Microsoft in a research report on Thursday. Finally, Daiwa Capital Markets reduced their target price on Microsoft from $640.00 to $630.00 and set a “buy” rating on the stock in a report on Friday, November 7th. One analyst has rated the stock with a Strong Buy rating, thirty-eight have issued a Buy rating and three have given a Hold rating to the company. According to MarketBeat, Microsoft currently has a consensus rating of “Moderate Buy” and an average price target of $599.72.

Insider Buying and Selling at Microsoft

In other news, CEO Judson Althoff sold 12,750 shares of the company’s stock in a transaction on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the transaction, the chief executive officer owned 129,349 shares of the company’s stock, valued at $63,577,620.48. This represents a 8.97% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Bradford L. Smith sold 38,500 shares of the business’s stock in a transaction on Monday, November 3rd. The shares were sold at an average price of $518.64, for a total value of $19,967,640.00. Following the sale, the insider owned 461,597 shares in the company, valued at approximately $239,402,668.08. The trade was a 7.70% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 54,100 shares of company stock worth $27,598,872 over the last three months. 0.03% of the stock is currently owned by insiders.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Company beat expectations on top and bottom lines (Q2 EPS $4.14; revenue $81.27B), showing continued revenue momentum in cloud and AI-driven services. MarketBeat: Microsoft beats Wall Street expectations
• Positive Sentiment: Azure and cloud remain growth engines (Azure growth still ~39% YoY) and Microsoft recognized meaningful revenue from OpenAI partnerships — signaling durable multi-year opportunity if monetization continues. TechCrunch: Microsoft gained $7.6B from OpenAI
• Positive Sentiment: Numerous analysts continue to rate MSFT as a buy/outperform and some firms reaffirm high price targets (DA Davidson $650 PT), suggesting Wall Street still sees meaningful upside despite the sell-off. TickerReport: DA Davidson reaffirmation
• Neutral Sentiment: Microsoft disclosed very large AI infrastructure capex this quarter; the move is strategically consistent with peers but timing of returns remains uncertain — a long‑term growth bet rather than an immediate earnings boost.
• Neutral Sentiment: There are reports of large, industry‑level funding talks for OpenAI (participants include Microsoft, Nvidia, Amazon) — potentially positive for future revenue but not an immediate cure for near‑term margin concerns. Reuters: Invest talks for OpenAI
• Negative Sentiment: CapEx soared (reported ~$37.5B), raising investor worry that heavy short‑term spending on GPUs and data centers will weigh on free cash flow and margins until monetization accelerates. FinancialPost: Record AI spending
• Negative Sentiment: Azure growth, while large in absolute terms, showed signs of moderation versus prior quarters — that subtle slowdown was enough to spook investors who want clearer near‑term payback from AI investments. FT: AI spending spooks investors
• Negative Sentiment: Following the release, multiple firms trimmed price targets and the stock experienced one of its largest single‑day drops in years—fueling a sector‑wide risk‑off move that amplified the decline. Reuters: Shares fall after results

Hedge Funds Weigh In On Microsoft

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. WFA Asset Management Corp increased its stake in shares of Microsoft by 27.0% in the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant’s stock worth $427,000 after buying an additional 216 shares during the period. Ironwood Wealth Management LLC. grew its stake in shares of Microsoft by 0.3% in 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 last quarter. Discipline Wealth Solutions LLC increased its holdings in Microsoft by 410.4% during 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 period. Wealth Group Ltd. increased its holdings in 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 purchasing an additional 28 shares during the period. Finally, Eagle Capital Management LLC lifted its holdings in Microsoft by 0.4% in 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 period. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Microsoft Stock Down 10.0%

The company has a 50 day moving average price of $477.57 and a 200-day moving average price of $500.68. The stock has a market capitalization of $3.22 trillion, a PE ratio of 30.83, a PEG ratio of 1.94 and a beta of 1.07. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings data on Wednesday, January 28th. The software giant reported $4.14 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.86 by $0.28. The business had revenue of $81.27 billion for the quarter, compared to the consensus estimate of $80.28 billion. Microsoft had a net margin of 35.71% and a return on equity of 32.45%. The company’s quarterly revenue was up 16.7% compared to the same quarter last year. During the same period in the previous year, the firm earned $3.23 EPS. As a group, analysts forecast that Microsoft Corporation will post 13.08 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend is Thursday, February 19th. Microsoft’s dividend payout ratio (DPR) is 25.89%.

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).