Microsoft (NASDAQ:MSFT) Trading Down 1.2% After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT) was down 1.2% during mid-day trading on Tuesday after TD Cowen lowered their price target on the stock from $655.00 to $625.00. TD Cowen currently has a buy rating on the stock. Microsoft traded as low as $449.28 and last traded at $454.52. Approximately 25,972,721 shares changed hands during mid-day trading, an increase of 4% from the average daily volume of 24,977,225 shares. The stock had previously closed at $459.86.

A number of other analysts have also recently commented on the company. Cowen set a $625.00 price target on Microsoft in a research report on Tuesday. Mizuho cut shares of Microsoft from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, November 18th. Barclays dropped their price target on shares of Microsoft from $625.00 to $610.00 and set an “overweight” rating on the stock in a research report on Monday, January 12th. Jefferies Financial Group reissued a “buy” rating on shares of Microsoft in a research note on Monday, January 5th. Finally, Sanford C. Bernstein raised their target price on Microsoft from $637.00 to $645.00 and gave the company an “outperform” rating in a research report on Thursday, October 30th. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-six have assigned a Buy rating and four have issued a Hold rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $629.46.

Insider Buying and Selling

In other Microsoft news, insider Bradford L. Smith sold 38,500 shares of the business’s stock in a transaction on Monday, November 3rd. The stock was sold at an average price of $518.64, for a total transaction of $19,967,640.00. Following the transaction, the insider owned 461,597 shares of the company’s stock, valued at approximately $239,402,668.08. The trade was a 7.70% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, CEO Judson Althoff sold 12,750 shares of the firm’s stock in a transaction on Tuesday, December 2nd. The stock was sold at an average price of $491.52, for a total value of $6,266,880.00. Following the completion of the sale, the chief executive officer directly owned 129,349 shares of the company’s stock, valued at $63,577,620.48. This trade represents a 8.97% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 54,100 shares of company stock worth $27,598,872. 0.03% of the stock is owned by corporate insiders.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: OpenAI, backed by Microsoft, reached a major revenue milestone in 2025, reinforcing MSFT’s strategic AI exposure and potential upside from services tied to OpenAI. Microsoft-Backed OpenAI Hits $20B Revenue Target in 2025
• Positive Sentiment: Microsoft announced a partnership with Bristol Myers Squibb to deploy AI imaging for earlier lung‑cancer detection — a commercial win in healthcare AI that could expand Azure and services revenue over time. Bristol Myers partners with Microsoft for AI-driven lung cancer detection
• Neutral Sentiment: Microsoft added third‑party integrations (e.g., Cobalt Teams in Microsoft Marketplace), which incrementally broadens ecosystem monetization but are not material near‑term revenue drivers. Cobalt Microsoft® Teams® Integration Now Available in the Microsoft Marketplace®
• Neutral Sentiment: Investors are bracing for Microsoft’s Jan. 28 quarterly report — expectations are elevated, making the stock sensitive to any execution misses or guidance nuance. Dear Microsoft Stock Fans, Mark Your Calendars for January 28
• Negative Sentiment: Reports that Azure growth and forward guidance disappointed expectations are pressuring the stock; cloud execution concerns directly affect revenue growth and multiples. Microsoft (MSFT) Traded Lower as Its Reported Azure Cloud Growth and Forward Guidance Fell Short of Expectations
• Negative Sentiment: Analysts trimmed price targets ahead of earnings (TD Cowen cut its target while keeping a Buy) and some firms revised models for heavy AI capex — these adjustments increase near‑term downside risk despite long‑term conviction. TD Cowen Adjusts Price Target on Microsoft to 625 from 655, Maintains Buy Rating
• Negative Sentiment: Macro and geopolitical headlines sparked a broader tech selloff today, amplifying pressure on large-cap growth names including MSFT. America’s Biggest Tech Stocks Lead Tuesday’s Selloff as Trump’s Greenland Rhetoric Rattles Markets
• Negative Sentiment: CEO Satya Nadella’s Davos comments warning of an AI “bubble” if adoption doesn’t broaden, and his notes on rising AI capex and energy costs, have added caution among investors about margin pressure and industry concentration risk. Satya Nadella’s biggest AI bubble warning yet is a challenge to the Fortune 500: it’s time to reinvent the knowledge worker

Institutional Investors Weigh In On Microsoft

A number of hedge funds have recently added to or reduced their stakes in the business. Wellington Capital Management Inc. acquired a new position in shares of Microsoft in the second quarter valued at $9,941,000. Sound View Wealth Advisors Group LLC grew its stake in Microsoft by 2.6% in the 2nd quarter. Sound View Wealth Advisors Group LLC now owns 94,120 shares of the software giant’s stock valued at $46,816,000 after buying an additional 2,373 shares during the last quarter. Bank Pictet & Cie Europe AG lifted its position in Microsoft by 3.8% during the second quarter. Bank Pictet & Cie Europe AG now owns 922,524 shares of the software giant’s stock worth $457,119,000 after acquiring an additional 33,382 shares during the last quarter. Weaver Capital Management LLC boosted its holdings in shares of Microsoft by 14.0% during the third quarter. Weaver Capital Management LLC now owns 18,340 shares of the software giant’s stock worth $9,499,000 after acquiring an additional 2,247 shares during the period. Finally, Gradient Investments LLC grew its position in shares of Microsoft by 4.3% in the third quarter. Gradient Investments LLC now owns 285,163 shares of the software giant’s stock valued at $147,700,000 after purchasing an additional 11,770 shares during the last quarter. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Microsoft Stock Performance

The company has a market cap of $3.38 trillion, a P/E ratio of 32.33, a price-to-earnings-growth ratio of 1.72 and a beta of 1.07. The stock has a 50 day moving average price of $483.04 and a two-hundred day moving average price of $502.46. The company has a quick ratio of 1.39, a current ratio of 1.40 and a debt-to-equity ratio of 0.10.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, October 29th. The software giant reported $4.13 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.65 by $0.48. Microsoft had a return on equity of 32.45% and a net margin of 35.71%.The business had revenue of $77.67 billion during the quarter, compared to the consensus estimate of $75.49 billion. During the same period in the previous year, the company posted $3.30 EPS. The firm’s quarterly revenue was up 18.4% on a year-over-year basis. On average, research analysts predict that Microsoft Corporation will post 13.08 earnings per share for the current fiscal year.

Microsoft Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be paid a $0.91 dividend. The ex-dividend date of this dividend is Thursday, February 19th. This represents a $3.64 annualized dividend and a yield of 0.8%. 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).