Microsoft (NASDAQ:MSFT) Shares Down 1.6% After Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT)’s stock price traded down 1.6% during trading on Friday after Griffin Securities downgraded the stock from a buy rating to a neutral rating. The company traded as low as $514.35 and last traded at $521.91. 34,624,308 shares traded hands during trading, an increase of 3% from the average daily volume of 33,493,441 shares. The stock had previously closed at $530.14.

Other research analysts also recently issued research reports about the stock. Yorkville Ives started coverage on shares of Microsoft in a research report on Monday, October 5th. They issued an “outperform” rating and a $615.00 price objective for the company. TD Cowen raised their target price on shares of Microsoft from $625.00 to $650.00 and gave the company a “buy” rating in a research note on Thursday. Deutsche Bank Aktiengesellschaft reiterated a “buy” rating and set a $600.00 price target on shares of Microsoft in a report on Monday, October 12th. Oppenheimer upped their price objective on Microsoft from $570.00 to $625.00 and gave the company an “outperform” rating in a research note on Monday. Finally, Benchmark restated a “buy” rating on shares of Microsoft in a research note on Friday, July 24th. One analyst has rated the stock with a Strong Buy rating, forty-five have assigned a Buy rating and four have issued a Hold rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus target price of $609.54.

Insider Activity at Microsoft

In other news, CEO Satya Nadella sold 86,525 shares of the firm’s stock in a transaction on Tuesday, September 1st. The shares were sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the completion of the transaction, the chief executive officer owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. This trade represents a 15.09% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Amy Hood sold 7,305 shares of Microsoft stock in a transaction on Tuesday, October 13th. The stock was sold at an average price of $545.42, for a total transaction of $3,984,293.10. Following the transaction, the executive vice president owned 555,396 shares in the company, valued at approximately $302,924,086.32. This trade represents a 1.30% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 150,314 shares of company stock worth $75,404,992. Corporate insiders own 0.03% of the company’s stock.

More Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft delivered a strong fiscal first-quarter beat, with revenue of $92.28 billion and adjusted EPS of $4.89, while revenue increased 18.8% year over year. Azure growth accelerated 48%, reinforcing the company’s position in the cloud and AI markets. Microsoft Earnings Expose a Growing Divide in the Magnificent 7 AI Trade
• Positive Sentiment: Analysts highlighted Microsoft’s strong free cash flow, diversified software ecosystem and large commercial backlog as advantages over cloud rivals. Multiple firms raised their price targets, and Wolfe Research upgraded the stock to “strong buy.” Microsoft is Winning the Cloud Wars
• Positive Sentiment: Management guided for second-quarter revenue of $96.0 billion to $97.1 billion, above consensus expectations. Expanding Copilot deployments, including partnerships with Estée Lauder and McGraw Hill, provide evidence of potential enterprise AI monetization. Microsoft and Estée Lauder Strategic Partnership
• Neutral Sentiment: Microsoft plans to raise approximately $25 billion in debt to fund AI infrastructure. Strong demand for the offering signals lender confidence, but the borrowing underscores how expensive the expansion has become. Microsoft Plans to Raise $25 Billion in Debt
• Negative Sentiment: Investors are questioning whether AI revenue will translate into sufficient profits. Capital expenditures remain enormous, cloud gross margins have reportedly declined, and Microsoft lowered its annual capex outlook to $170 billion because of third-party capacity delays. Microsoft’s Cloud Growth Accelerates and Spending Rises
• Negative Sentiment: The voluntary exit offer available to roughly 60,000 employees has raised concerns about restructuring and signals a shift toward fewer workers and more automation. Microsoft also faces concentration risk because OpenAI-related arrangements represented roughly 11% of quarterly revenue, while weaker Windows PC demand adds pressure outside the cloud business. Microsoft’s 60,000-Person Buyout Offer

Institutional Investors Weigh In On Microsoft

Several institutional investors and hedge funds have recently made changes to their positions in the stock. Empirical Financial Services LLC d.b.a. Empirical Wealth Management raised its holdings in Microsoft by 4.0% during the second quarter. Empirical Financial Services LLC d.b.a. Empirical Wealth Management now owns 229,490 shares of the software giant’s stock worth $85,604,000 after buying an additional 8,773 shares during the last quarter. D.B. Root & Company LLC acquired a new position in shares of Microsoft during the second quarter valued at about $3,652,000. Dearborn Partners LLC acquired a new position in shares of Microsoft during the second quarter valued at about $75,641,000. GTS Securities LLC increased its position in shares of Microsoft by 44.6% during the second quarter. GTS Securities LLC now owns 271,597 shares of the software giant’s stock worth $101,311,000 after acquiring an additional 83,734 shares in the last quarter. Finally, Henson Edgewater Management LLC bought a new stake in shares of Microsoft during the second quarter worth about $9,430,000. Institutional investors and hedge funds own 71.13% of the company’s stock.

Microsoft Stock Down 1.6%

The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a market cap of $3.88 trillion, a price-to-earnings ratio of 27.24, a price-to-earnings-growth ratio of 1.67 and a beta of 1.10. The stock’s fifty day moving average is $512.10 and its two-hundred day moving average is $438.21.

Microsoft (NASDAQ:MSFT) last released its quarterly earnings results on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.72 by $0.17. The business had revenue of $92.28 billion during the quarter, compared to the consensus estimate of $90.62 billion. Microsoft had a return on equity of 32.31% and a net margin of 41.17%. The company’s quarterly revenue was up 18.8% on a year-over-year basis. During the same quarter in the previous year, the business earned $4.13 EPS. Sell-side analysts predict that Microsoft Corporation will post 19.66 earnings per share for the current fiscal year.

Microsoft Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be given a dividend of $0.98 per share. The ex-dividend date of this dividend is Thursday, November 19th. This is a positive change from Microsoft’s previous quarterly dividend of $0.91. This represents a $3.92 annualized dividend and a dividend yield of 0.8%. Microsoft’s payout ratio is presently 20.27%.

About Microsoft

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company’s principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.