Microsoft (NASDAQ:MSFT) Shares Down 2.3% on Analyst Downgrade

Microsoft Corporation (NASDAQ:MSFT)’s share price was down 2.3% on Wednesday after Wells Fargo & Company lowered their price target on the stock from $665.00 to $630.00. Wells Fargo & Company currently has an overweight rating on the stock. Microsoft traded as low as $438.68 and last traded at $444.11. Approximately 37,537,764 shares changed hands during mid-day trading, an increase of 45% from the average daily volume of 25,956,799 shares. The stock had previously closed at $454.52.

A number of other research firms have also recently commented on MSFT. KeyCorp reiterated an “overweight” rating on shares of Microsoft in a report on Thursday, October 30th. Royal Bank Of Canada reaffirmed a “buy” rating on shares of Microsoft in a research report on Monday, January 5th. TD Cowen dropped their price objective on Microsoft from $655.00 to $625.00 and set a “buy” rating for the company in a report on Tuesday. Raymond James Financial decreased their price objective on shares of Microsoft from $630.00 to $600.00 and set an “outperform” rating on the stock in a research note on Thursday, October 30th. Finally, Jefferies Financial Group restated a “buy” rating on shares of Microsoft in a research note on Monday, January 5th. Three analysts have rated the stock with a Strong Buy rating, thirty-five have given a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, the stock currently has an average rating of “Buy” and a consensus target price of $620.79.

Insider Buying and Selling at Microsoft

In related news, insider Bradford L. Smith sold 38,500 shares of the firm’s stock in a transaction that occurred on 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 completion of the transaction, the insider directly owned 461,597 shares of the company’s stock, valued at approximately $239,402,668.08. This trade represents a 7.70% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Judson Althoff sold 12,750 shares of the business’s stock in a transaction on Tuesday, December 2nd. The shares were sold at an average price of $491.52, for a total transaction of $6,266,880.00. Following the transaction, the chief executive officer 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. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 54,100 shares of company stock worth $27,598,872 over the last ninety days. 0.03% of the stock is currently owned by company insiders.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: High-visibility marketing + product partnership — Microsoft announced a multi-year technology and sponsorship deal with the Mercedes‑AMG PETRONAS F1 Team, raising brand exposure for Azure and AI capabilities and signaling enterprise demand for cloud/AI partnerships. Mercedes reveal images, announce Microsoft deal
• Positive Sentiment: Government win — Microsoft landed a roughly $170M Air Force Cloud One task order for Azure through 2028, validating Azure’s government demand and recurring-revenue profile. Defense contracts reduce revenue uncertainty and support cloud backlog visibility. Air Force awards $170M Cloud One contract
• Positive Sentiment: Institutional conviction — Activist/hedge investors (Third Point’s Dan Loeb) increased stakes in Microsoft, signaling belief in MSFT’s AI/cloud growth despite 2025 volatility. That buying can support the stock ahead of earnings. Billionaire investor doubles down on AI, boosts stakes
• Positive Sentiment: Consumer/engagement catalyst — Xbox Developer_Direct presentation lifted sentiment around gaming/content growth and monetization opportunities for Microsoft’s consumer franchises. Xbox Developer_Direct 2026 coverage
• Neutral Sentiment: Analyst views remain mixed but generally constructive — Several firms reiterated Buy/Overweight ratings (Jefferies, Guggenheim, Wells Fargo) even as price targets were trimmed in places, reflecting confidence in long‑term AI/cloud upside but acknowledgement of near‑term risks. Jefferies buy rating
• Negative Sentiment: Service outage hit — A Microsoft 365/Outlook outage disrupted access to email, files and meetings for thousands of users, creating immediate operational risk for enterprise customers and short‑term headline pressure on trust in cloud reliability. Microsoft 365 outage report
• Negative Sentiment: Margin and earnings concerns — Analysts and commentaries flagged cloud/AI margins as a key “tripwire” into the upcoming fiscal Q2 results; higher data‑center power and capacity costs could pressure near‑term margins if revenue mix doesn’t improve. That is weighing on the stock into earnings. Cloud margins are the tripwire ahead of FQ2
• Negative Sentiment: Analyst cuts/downgrades — A few shops trimmed price targets or signaled range‑bound outlooks (Rothschild, TD Cowen, others), which feeds short‑term selling pressure given MSFT’s recent pullback. Rothschild price target cut

Institutional Investors Weigh In On Microsoft

Several institutional investors have recently bought and sold shares of the stock. Vanguard Group Inc. boosted its holdings in shares of Microsoft by 2.0% during the second quarter. Vanguard Group Inc. now owns 705,077,786 shares of the software giant’s stock worth $350,712,742,000 after purchasing an additional 13,691,572 shares during the period. State Street Corp raised its position in Microsoft by 1.1% during the 2nd quarter. State Street Corp now owns 299,196,519 shares of the software giant’s stock valued at $148,823,341,000 after purchasing an additional 3,166,275 shares during the last quarter. Geode Capital Management LLC raised its position in Microsoft by 2.0% during the 2nd quarter. Geode Capital Management LLC now owns 179,001,751 shares of the software giant’s stock valued at $88,714,256,000 after purchasing an additional 3,532,054 shares during the last quarter. Norges Bank purchased a new stake in Microsoft in the 2nd quarter worth approximately $50,493,678,000. Finally, Kingstone Capital Partners Texas LLC grew its position in shares of Microsoft by 564,387.1% in the 2nd quarter. Kingstone Capital Partners Texas LLC now owns 90,549,369 shares of the software giant’s stock worth $45,040,162,000 after buying an additional 90,533,328 shares during the last quarter. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

Microsoft Trading Up 1.5%

The company has a debt-to-equity ratio of 0.10, a quick ratio of 1.39 and a current ratio of 1.40. The stock has a market capitalization of $3.35 trillion, a P/E ratio of 32.07, a price-to-earnings-growth ratio of 1.66 and a beta of 1.07. The stock has a 50-day moving average price of $479.57 and a two-hundred day moving average price of $501.40.

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

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a dividend of $0.91 per share. The ex-dividend date is Thursday, February 19th. This represents a $3.64 annualized dividend and a dividend yield of 0.8%. Microsoft’s payout ratio is currently 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).