Microsoft (NASDAQ:MSFT) Shares Down 2.3% – Here’s What Happened

Microsoft Corporation (NASDAQ:MSFT)’s share price was down 2.3% during trading on Wednesday . The stock traded as low as $491.52 and last traded at $492.43. Approximately 27,286,649 shares were traded during mid-day trading, a decline of 28% from the average session volume of 37,694,008 shares. The stock had previously closed at $503.81.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft is expanding its in-house Maia AI-chip program, including plans for the Maia 200 and a potential Maia 300 rollout. Custom processors could reduce dependence on Nvidia, lower Azure AI costs and improve infrastructure efficiency over time. However, achieving meaningful scale will require substantial upfront investment. Microsoft Stock Drops While Maia Chip Ambitions Expand
• Positive Sentiment: Wells Fargo raised its Microsoft price target to $700 from $650 and maintained an Overweight rating, citing confidence that the company’s AI and cloud growth justify a premium valuation. Wells Fargo Raises Microsoft Price Target
• Positive Sentiment: Analysts and investors continue to point to strong Azure momentum, Microsoft 365 Copilot adoption and AI monetization as potential drivers of further gains. New or expanded relationships with S&P Global, Manulife and Brazilian enterprises could support demand for Microsoft’s cloud and AI products. S&P Global Expands Collaboration with Microsoft
• Neutral Sentiment: Microsoft recently delivered an earnings beat, with revenue growth accelerating and Azure expectations improving. Nevertheless, the stock has rallied sharply since the report, increasing the likelihood of profit-taking and making valuation a more immediate concern for investors.
• Negative Sentiment: Microsoft’s expanding data-center and Maia-chip commitments are intensifying worries that AI capital expenditures could pressure margins, free cash flow and investment returns before new capacity is fully utilized. Microsoft’s AI Data Center Push
• Negative Sentiment: A newly published Windows zero-day vulnerability reportedly enables system-wide access to devices and data, creating potential reputational, remediation and security-liability risks. New Windows Zero-Day Bug Published
• Negative Sentiment: Elon Musk’s claim that SpaceX’s Grok 4.6 is the leading AI model adds to competitive pressure in an already crowded AI market, particularly as investors question the cost and pace of Microsoft’s AI buildout.

Analyst Ratings Changes

Several equities analysts have recently issued reports on the stock. President Capital lifted their price objective on shares of Microsoft from $500.00 to $520.00 and gave the stock a “buy” rating in a research note on Thursday, April 30th. Morgan Stanley restated an “overweight” rating on shares of Microsoft in a research report on Thursday, July 30th. Guggenheim reaffirmed a “buy” rating and issued a $586.00 price target on shares of Microsoft in a report on Monday, July 27th. Tigress Financial increased their price objective on Microsoft from $680.00 to $690.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Finally, Deutsche Bank Aktiengesellschaft reissued a “buy” rating on shares of Microsoft in a research note on Monday, July 20th. Forty-two research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $560.27.

Microsoft Price Performance

The company has a quick ratio of 1.22, a current ratio of 1.23 and a debt-to-equity ratio of 0.07. The stock’s 50 day moving average price is $407.02 and its two-hundred day moving average price is $407.37. The firm has a market capitalization of $3.66 trillion, a price-to-earnings ratio of 27.42, a P/E/G ratio of 1.63 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last issued its earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating 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 firm had revenue of $90.01 billion for the quarter, compared to the consensus estimate of $87.62 billion. During the same quarter in the previous year, the company posted $3.65 earnings per share. The business’s quarterly revenue was up 17.7% compared to the same quarter last year. Analysts anticipate that Microsoft Corporation will post 19.58 EPS for the current fiscal year.

Microsoft Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a $0.91 dividend. The ex-dividend date is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a yield of 0.7%. Microsoft’s dividend payout ratio is currently 20.27%.

Insider Activity at Microsoft

In other news, EVP Takeshi Numoto sold 4,810 shares of the stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $496.48, for a total transaction of $2,388,068.80. Following the transaction, the executive vice president owned 42,677 shares in the company, valued at $21,188,276.96. This represents a 10.13% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of the firm’s stock in a transaction 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 owned 46,003 shares in the company, valued at $18,922,874.02. This represents a 2.67% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 38,572 shares of company stock valued at $17,775,330. 0.03% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Microsoft

Hedge funds have recently bought and sold shares of the business. Norges Bank acquired a new position in Microsoft during the fourth quarter valued at approximately $50,664,631,000. Auto Owners Insurance Co boosted its holdings in shares of Microsoft by 56,160.8% during the 4th quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant’s stock worth $29,073,486,000 after buying an additional 60,009,531 shares during the period. Nuveen LLC acquired a new position in Microsoft in the 1st quarter valued at $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in Microsoft by 500.0% in the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant’s stock worth $30,840,432,000 after acquiring an additional 49,618,571 shares during the period. Finally, Laurel Wealth Advisors LLC lifted its position in Microsoft by 49,640.3% during the 2nd quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant’s stock worth $14,905,904,000 after acquiring an additional 29,906,791 shares during the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

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).