Microsoft (NASDAQ:MSFT) Trading Down 2.5% – What’s Next?

Microsoft Corporation (NASDAQ:MSFT) shares traded down 2.5% on Friday . The stock traded as low as $356.51 and last traded at $356.77. 37,573,448 shares were traded during mid-day trading, an increase of 4% from the average session volume of 36,256,055 shares. The stock had previously closed at $365.97.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Wall Street bulls point to upside: several analysts tell investors the pullback creates a large rebound opportunity for MSFT, arguing the sell-off may be overdone and upside remains if AI revenue ramps as expected. Wall Street Says Microsoft Stock Has 89% Rebound Potential
• Positive Sentiment: Options flow shows some investors are positioning for a recovery — unusual call buying suggests pockets of speculative conviction that MSFT will rally from current levels. Investors are Piling into Microsoft Call Options – Unusual MSFT Options Activity Today
• Neutral Sentiment: Infrastructure support expands in Texas: Crusoe announced a new 900MW AI campus in Abilene that will support Microsoft’s large-scale AI workloads — this eases short-term compute capacity constraints but also highlights growing third‑party infrastructure activity around Microsoft. Crusoe Announces New 900 MW AI Factory Campus in Abilene, Texas to Support Microsoft AI Infrastructure
• Neutral Sentiment: LinkedIn ad momentum: Microsoft’s LinkedIn Marketing Solutions is showing ad growth, which provides steady, non‑cloud revenue tailwinds even as cloud/AI narratives dominate headlines. Microsoft Benefits From LinkedIn Ad Growth: More Upside Ahead?
• Negative Sentiment: Partnership friction with OpenAI: reporting says Microsoft is taking on a Texas data‑center project OpenAI declined and that the two firms are no longer tightly aligned — investors view a weaker OpenAI relationship as a strategic headwind for Microsoft’s AI lead and product leverage. Microsoft is picking up a Texas data center project OpenAI didn’t want
• Negative Sentiment: Heavy AI spending and capital allocation concerns: commentators highlight Microsoft’s very large AI capex run rate (reported coverage cites roughly $30B/quarter), fueling worry that near‑term returns won’t keep pace with spending and pressuring sentiment. Microsoft Is Down 24% This Year While Spending $30B a Quarter on AI
• Negative Sentiment: Operational caution: reports of hiring freezes in major cloud and sales groups plus lingering concerns about Copilot adoption and weaker near‑term guidance have amplified downside pressure and driven analyst downgrades/target cuts. Microsoft freezes hiring in major cloud, sales groups, The Information reports

Wall Street Analyst Weigh In

A number of analysts recently weighed in on the stock. KeyCorp reduced their price objective on shares of Microsoft from $630.00 to $600.00 and set an “overweight” rating on the stock in a research report on Thursday, January 29th. Mizuho dropped their target price on Microsoft from $640.00 to $620.00 and set an “outperform” rating for the company in a research report on Wednesday, January 21st. Morgan Stanley reaffirmed an “overweight” rating on shares of Microsoft in a research note on Thursday, January 29th. The Goldman Sachs Group reiterated a “buy” rating on shares of Microsoft in a report on Thursday, February 12th. Finally, TD Cowen restated a “buy” rating on shares of Microsoft in a report on Thursday, January 29th. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating and five have issued a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $588.97.

Microsoft Stock Down 2.5%

The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.38 and a current ratio of 1.39. The company has a fifty day simple moving average of $411.42 and a two-hundred day simple moving average of $468.63. The firm has a market capitalization of $2.65 trillion, a PE ratio of 22.31, a PEG ratio of 1.41 and a beta of 1.10.

Microsoft (NASDAQ:MSFT) last announced its quarterly earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating the consensus estimate of $3.86 by $0.28. Microsoft had a return on equity of 32.34% and a net margin of 39.04%.The firm had revenue of $81.27 billion for the quarter, compared to analyst estimates of $80.28 billion. During the same quarter last year, the firm posted $3.23 earnings per share. The business’s revenue for the quarter was up 16.7% on a year-over-year basis. Analysts forecast that Microsoft Corporation will post 13.08 EPS for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 dividend on an annualized basis and a yield of 1.0%. Microsoft’s dividend payout ratio (DPR) is 22.76%.

Insider Activity

In other Microsoft news, Director John W. Stanton acquired 5,000 shares of the business’s stock in a transaction that occurred on Wednesday, February 18th. The shares were bought at an average cost of $397.35 per share, with a total value of $1,986,750.00. Following the completion of the acquisition, the director directly owned 83,905 shares in the company, valued at $33,339,651.75. This represents a 6.34% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Kathleen T. Hogan sold 12,321 shares of the business’s stock in a transaction that occurred on Friday, March 6th. The stock was sold at an average price of $409.52, for a total transaction of $5,045,695.92. Following the completion of the transaction, the executive vice president directly owned 137,933 shares of the company’s stock, valued at $56,486,322.16. This trade represents a 8.20% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 0.03% of the company’s stock.

Institutional Trading of Microsoft

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Longfellow Investment Management Co. LLC grew its position in shares of Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after buying an additional 20 shares during the last quarter. Bernzott Capital Advisors purchased a new stake in Microsoft during the fourth quarter valued at approximately $34,000. Bayforest Capital Ltd purchased a new stake in Microsoft during the third quarter valued at approximately $38,000. Timmons Wealth Management LLC acquired a new stake in Microsoft in the fourth quarter valued at approximately $36,000. Finally, Fairway Wealth LLC boosted its stake in Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after acquiring an additional 66 shares in the last quarter. 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).