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

Shares of Microsoft Corporation (NASDAQ:MSFT) fell 1.2% during trading on Tuesday after Rothschild & Co Redburn lowered their price target on the stock from $500.00 to $450.00. Rothschild & Co Redburn currently has a neutral rating on the stock. Microsoft traded as low as $449.28 and last traded at $454.52. 25,972,721 shares traded hands during mid-day trading, an increase of 4% from the average session volume of 24,977,225 shares. The stock had previously closed at $459.86.

A number of other equities research analysts have also weighed in on MSFT. Wedbush reiterated an “outperform” rating and set a $625.00 target price on shares of Microsoft in a research note on Monday, December 22nd. Cantor Fitzgerald set a $639.00 price objective on Microsoft in a research report on Thursday, October 30th. Melius Research increased their target price on Microsoft from $595.00 to $625.00 in a report on Thursday, September 25th. UBS Group restated a “buy” rating and set a $650.00 price target on shares of Microsoft in a research note on Thursday, October 30th. Finally, Morgan Stanley increased their price objective on shares of Microsoft from $625.00 to $650.00 and gave the stock an “overweight” rating in a research note on Thursday, October 30th. Three research analysts have rated the stock with a Strong Buy rating, thirty-five have given a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, the stock has an average rating of “Buy” and a consensus price target of $624.05.

Insiders Place Their Bets

In other Microsoft news, EVP Takeshi Numoto sold 2,850 shares of the stock in a transaction on Thursday, December 4th. The stock was sold at an average price of $478.72, for a total value of $1,364,352.00. Following the completion of the sale, the executive vice president owned 55,782 shares in the company, valued at approximately $26,703,959.04. This represents a 4.86% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, insider Bradford L. Smith sold 38,500 shares of the firm’s stock in a transaction dated Monday, November 3rd. The shares were sold at an average price of $518.64, for a total value of $19,967,640.00. Following the sale, the insider directly owned 461,597 shares in the company, valued at approximately $239,402,668.08. This represents a 7.70% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 54,100 shares of company stock worth $27,598,872 over the last three months. 0.03% of the stock is currently owned by company insiders.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Major industry and healthcare partnerships bolster MSFT’s commercial AI narrative — Bristol Myers Squibb will use Microsoft’s AI radiology tools to speed lung cancer detection, a commercial validation for Azure/AI revenue mix. Bristol Myers partners with Microsoft for AI-driven lung cancer detection
• Positive Sentiment: Enterprise product integration: Board announced Board Agents built on Microsoft Foundry, signaling more platform-level demand for Azure agentic AI services. Board Collaborates with Microsoft to Bring Agentic AI Into the Core of Enterprise Planning
• Positive Sentiment: Marketplace and ISV ecosystem wins continue to expand commercial reach (Cobalt Teams integration, RKON Marketplace activity), supporting recurring revenue and GTM leverage. Cobalt Microsoft® Teams® Integration Now Available in the Microsoft Marketplace®
• Positive Sentiment: Top analysts still see long-term upside — Goldman Sachs reiterated Buy and keeps a high price target, reflecting belief that AI + cloud growth offsets higher power/capex. Microsoft: Maintaining a Buy Rating as AI and Cloud Growth Offset Structurally Higher Power Costs
• Neutral Sentiment: TD Cowen trimmed its price target (from $655 to $625) but kept a Buy rating, noting Azure capacity constraints that may keep the stock range-bound before earnings. TD Cowen Sees Microsoft (MSFT) Shares Range-Bound Ahead of Earnings
• Neutral Sentiment: Investors are focused on MSFT’s upcoming earnings report on Jan. 28 — expectations are elevated, so results and commentary on Azure capacity/costs will likely drive near-term volatility. Dear Microsoft Stock Fans, Mark Your Calendars for January 28
• Negative Sentiment: Analyst downgrades/price-target cuts are weighing on sentiment — Rothschild & Co Redburn cut its PT to $450 and moved to Neutral, tightening near-term upside assumptions. Rothschild & Co Redburn adjusts price target on Microsoft to 450 from 500, maintains neutral rating
• Negative Sentiment: CEO Satya Nadella’s public warnings that AI could “lose social permission” if it burns energy without real-world benefits have raised regulatory/PR risk and highlighted rising energy/capex pressures for hyperscalers. Microsoft CEO Satya Nadella Warns AI Could Lose ‘Social Permission’ If It Burns Energy Without Real-World Benefits In Health And Education
• Negative Sentiment: Reports that Azure growth and forward guidance previously fell short of expectations — plus capacity constraints — are pressuring near-term growth multiple assumptions. Microsoft (MSFT) Traded Lower as Its Reported Azure Cloud Growth and Forward Guidance Fell Short of Expectations

Institutional Trading of Microsoft

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. Longfellow Investment Management Co. LLC lifted its position in shares of Microsoft by 51.3% in the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after buying an additional 20 shares in the last quarter. Westend Capital Management LLC raised its holdings in shares of Microsoft by 386.7% during the 2nd quarter. Westend Capital Management LLC now owns 73 shares of the software giant’s stock worth $36,000 after acquiring an additional 58 shares in the last quarter. Bayforest Capital Ltd bought a new position in shares of Microsoft during the 3rd quarter valued at approximately $38,000. Sellwood Investment Partners LLC bought a new position in shares of Microsoft during the 3rd quarter valued at approximately $49,000. Finally, University of Illinois Foundation purchased a new position in shares of Microsoft in the second quarter valued at $50,000. Institutional investors own 71.13% of the company’s stock.

Microsoft Price Performance

The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39. The firm’s 50-day moving average is $480.62 and its two-hundred day moving average is $501.75. The company has a market cap of $3.30 trillion, a P/E ratio of 31.59, a PEG ratio of 1.70 and a beta of 1.07.

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

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Stockholders of record on Thursday, February 19th will be paid a $0.91 dividend. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. The ex-dividend date of this dividend is Thursday, February 19th. Microsoft’s dividend payout ratio (DPR) is presently 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).