Microsoft (NASDAQ:MSFT) Shares Down 1.9% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) fell 1.9% during trading on Wednesday . The company traded as low as $386.96 and last traded at $390.34. Approximately 27,672,869 shares traded hands during mid-day trading, a decline of 26% from the average session volume of 37,255,367 shares. The stock had previously closed at $397.75.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Truist reaffirmed its Buy rating on Microsoft and set a $575 price target, while other analysts also reiterated that the stock looks undervalued after its recent weakness. Analyst price target update
• Positive Sentiment: Bernstein and Morgan Stanley both highlighted Microsoft’s AI and cloud strengths, saying Azure growth, AI margins, and long-term “relationships” with enterprise customers could support a rebound into earnings. Bernstein outlook Morgan Stanley commentary
• Positive Sentiment: Microsoft expanded its partnership with Mistral AI and committed support for the DOE’s Genesis Mission, reinforcing its push to build out AI infrastructure and enterprise AI offerings. Reuters Mistral deal
• Positive Sentiment: Reports that Microsoft is helping drive record hyperscaler data-center demand, including a nuclear-power AI initiative with Nvidia and Oklo, suggest continued heavy AI infrastructure spending by major customers and partners. Oklo AI initiative
• Neutral Sentiment: Wall Street is focused on next week’s earnings for clues on Azure growth, AI spending, and the payoff from Microsoft’s broad AI investments.
• Negative Sentiment: Microsoft is facing multiple securities class-action lawsuits tied to alleged misleading AI and Copilot disclosures, which is adding headline risk and weighing on sentiment. Class action lawsuit alert
• Negative Sentiment: Some articles point to concerns that Copilot is losing free features and that Microsoft’s AI execution has not yet fully justified its spending, keeping pressure on the stock despite bullish long-term views. Copilot concerns

Analysts Set New Price Targets

Several research firms have recently issued reports on MSFT. Weiss Ratings restated a “hold (c)” rating on shares of Microsoft in a research report on Monday, July 6th. President Capital increased their price target on shares of Microsoft from $500.00 to $520.00 and gave the company a “buy” rating in a research report on Thursday, April 30th. Stifel Nicolaus decreased their price objective on shares of Microsoft from $415.00 to $400.00 and set a “hold” rating for the company in a report on Thursday, June 25th. BMO Capital Markets upped their target price on shares of Microsoft from $500.00 to $515.00 and gave the company an “outperform” rating in a research note on Tuesday, July 7th. Finally, Raymond James Financial lowered shares of Microsoft from a “market perform” rating to a “market perform” rating in a report on Tuesday, May 5th. Forty-three equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the company. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average price target of $556.37.

Microsoft Price Performance

The company has a 50-day moving average of $399.87 and a 200-day moving average of $409.57. The company has a debt-to-equity ratio of 0.08, a quick ratio of 1.27 and a current ratio of 1.28. The firm has a market capitalization of $2.90 trillion, a price-to-earnings ratio of 23.23, a price-to-earnings-growth ratio of 1.20 and a beta of 1.13.

Microsoft (NASDAQ:MSFT) last announced its earnings results on Wednesday, April 29th. The software giant reported $4.27 EPS for the quarter, topping the consensus estimate of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The firm had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.44 billion. The business’s quarterly revenue was up 18.3% on a year-over-year basis. During the same period last year, the company posted $3.46 EPS. As a group, research analysts anticipate that Microsoft Corporation will post 16.71 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be given a $0.91 dividend. This represents a $3.64 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Thursday, August 20th. Microsoft’s payout ratio is currently 21.67%.

Insider Buying and Selling

In other Microsoft news, CEO Judson Althoff sold 15,500 shares of Microsoft stock in a transaction dated 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 sale, the chief executive officer owned 110,477 shares of the company’s stock, valued at $50,928,792.23. This trade represents a 12.30% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, EVP Takeshi Numoto sold 4,500 shares of the business’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total value of $1,812,780.00. Following the completion of the sale, the executive vice president owned 47,468 shares in the company, valued at approximately $19,122,009.12. This trade represents a 8.66% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 23,762 shares of company stock valued at $10,508,361. Company insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

Several institutional investors have recently bought and sold shares of the company. Longfellow Investment Management Co. LLC increased its stake in Microsoft by 51.3% in the 2nd quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock valued at $29,000 after buying an additional 20 shares during the last quarter. Bernzott Capital Advisors acquired a new position in shares of Microsoft during the 4th quarter worth about $34,000. Frankly Finances LLC acquired a new position in shares of Microsoft during the 2nd quarter worth about $35,000. Timmons Wealth Management LLC bought a new position in shares of Microsoft in the 4th quarter valued at about $36,000. Finally, Fairway Wealth LLC increased its position in shares of 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 during the last quarter. 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).