Microsoft (NASDAQ:MSFT) Trading Down 3.5% – What’s Next?

Shares of Microsoft Corporation (NASDAQ:MSFT) were down 3.5% during mid-day trading on Thursday . The company traded as low as $349.20 and last traded at $352.83. 64,519,166 shares traded hands during trading, an increase of 77% from the average session volume of 36,489,738 shares. The stock had previously closed at $365.46.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft continues to deepen its AI ecosystem through new partnerships and integrations, including expanded collaborations with FPT, PitchBook, Daloopa, and ICON plc, which reinforce demand for Microsoft 365 Copilot and Azure-based enterprise tools. PitchBook expands premium AI integrations with Microsoft 365 Copilot and Copilot in Excel
• Positive Sentiment: Microsoft’s 20-year power deal with Chevron could help secure long-term energy capacity for AI data centers, reducing one of the biggest infrastructure bottlenecks for Azure growth. Microsoft Solves AI’s Biggest Bottleneck With Chevron Deal
• Positive Sentiment: Analyst commentary remains constructive from some corners, with several reports arguing MSFT is oversold and that its AI and cloud franchises still support meaningful long-term upside. Microsoft has an AI story that goes beyond OpenAI
• Neutral Sentiment: Microsoft and OpenAI backers are helping launch Raise US, a workforce-training group aimed at preparing workers for AI disruption; the move supports Microsoft’s broader AI positioning but is not a direct near-term earnings catalyst. Microsoft supports new organization to prepare workers for AI
• Negative Sentiment: Stifel lowered its price target on Microsoft to $400 and warned that Wall Street may be too optimistic about fiscal 2027 gross margins as Azure growth and capital spending weigh on profitability. Microsoft stock slips amid analyst concern about margins
• Negative Sentiment: Microsoft raised Xbox console prices again worldwide starting Aug. 1 because of a sharp memory and storage chip shortage, highlighting rising hardware costs and weaker gaming economics. Microsoft lifts price of Xbox consoles due to soaring component costs
• Negative Sentiment: EU regulators said Microsoft Azure should face stricter Digital Markets Act “gatekeeper” rules, which could add compliance burdens and limit some cloud-pricing or platform advantages. Amazon and Microsoft cloud computing services should fall under EU tech rules
• Negative Sentiment: Microsoft is also facing renewed skepticism around its quantum computing claims and a securities class-action process, both of which add headline risk and pressure sentiment. Microsoft’s quantum computing technology called into question again

Analysts Set New Price Targets

MSFT has been the subject of a number of recent analyst reports. The Goldman Sachs Group restated a “buy” rating on shares of Microsoft in a research report on Thursday, April 30th. Phillip Securities upgraded Microsoft to a “buy” rating and set a $485.00 target price on the stock in a research report on Wednesday, May 13th. TD Cowen reissued a “buy” rating and issued a $540.00 price target on shares of Microsoft in a research note on Thursday, June 4th. Scotiabank cut their price target on shares of Microsoft from $600.00 to $550.00 and set an “outperform” rating for the company in a report on Thursday, April 30th. Finally, Piper Sandler reaffirmed an “overweight” rating on shares of Microsoft in a report on Tuesday, May 26th. Forty-one equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $560.86.

Microsoft Price Performance

The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The stock has a market capitalization of $2.62 trillion, a price-to-earnings ratio of 21.00, a price-to-earnings-growth ratio of 1.35 and a beta of 1.11. The stock has a 50 day moving average price of $411.93 and a 200-day moving average price of $422.73.

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

Microsoft Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 1.0%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s dividend payout ratio (DPR) is currently 21.67%.

Insider Buying and Selling

In other Microsoft 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 value of $519,111.08. Following the transaction, the executive vice president directly owned 46,003 shares of the company’s stock, valued at $18,922,874.02. This trade represents a 2.67% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO Judson Althoff sold 15,500 shares of the business’s stock in a transaction that occurred 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 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. Over the last three months, insiders have sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is owned by insiders.

Hedge Funds Weigh In On Microsoft

Institutional investors have recently added to or reduced their stakes in the stock. Vanguard Group Inc. increased its position in Microsoft by 2.3% during the fourth quarter. Vanguard Group Inc. now owns 717,942,580 shares of the software giant’s stock worth $347,211,391,000 after purchasing an additional 15,955,898 shares during the last quarter. State Street Corp grew its stake in shares of Microsoft by 2.1% in the 4th quarter. State Street Corp now owns 306,150,608 shares of the software giant’s stock valued at $148,060,557,000 after buying an additional 6,388,930 shares during the period. Geode Capital Management LLC raised its position in shares of Microsoft by 1.1% during the 4th quarter. Geode Capital Management LLC now owns 182,618,400 shares of the software giant’s stock valued at $88,056,019,000 after buying an additional 1,911,142 shares during the period. Morgan Stanley lifted its holdings in Microsoft by 0.8% in the fourth quarter. Morgan Stanley now owns 121,220,561 shares of the software giant’s stock valued at $58,624,690,000 after acquiring an additional 980,439 shares during the last quarter. Finally, Norges Bank acquired a new position in Microsoft in the fourth quarter valued at approximately $50,664,631,000. Hedge funds and other institutional investors 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).