Bank of America Has Lowered Expectations for Microsoft (NASDAQ:MSFT) Stock Price

Microsoft (NASDAQ:MSFT) had its price target decreased by Bank of America from $640.00 to $520.00 in a research note issued on Monday,Benzinga reports. The firm currently has a “buy” rating on the software giant’s stock. Bank of America‘s price objective would indicate a potential upside of 8.20% from the stock’s previous close.

A number of other equities research analysts also recently weighed in on the company. Rothschild & Co Redburn lowered their price target on Microsoft from $500.00 to $450.00 and set a “neutral” rating for the company in a report on Wednesday, January 21st. BMO Capital Markets lowered their target price on shares of Microsoft from $650.00 to $625.00 and set an “outperform” rating for the company in a research note on Thursday, October 30th. DA Davidson reissued a “buy” rating and set a $650.00 target price on shares of Microsoft in a report on Thursday, December 4th. BNP Paribas Exane lifted their price target on shares of Microsoft from $630.00 to $632.00 and gave the company an “outperform” rating in a report on Monday, November 3rd. Finally, Citigroup lowered their price objective on shares of Microsoft from $690.00 to $660.00 and set a “buy” rating for the company in a research report on Wednesday, January 21st. Three investment analysts have rated the stock with a Strong Buy rating, thirty-five have given a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat, the company has a consensus rating of “Buy” and an average price target of $612.58.

Microsoft Trading Up 2.2%

MSFT opened at $480.58 on Monday. The stock has a market capitalization of $3.57 trillion, a PE ratio of 34.18, a P/E/G ratio of 1.89 and a beta of 1.07. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39. Microsoft has a 12-month low of $344.79 and a 12-month high of $555.45. The firm’s fifty day moving average price is $477.68 and its 200 day moving average price is $500.81.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Wednesday, October 29th. The software giant reported $4.13 EPS for the quarter, topping the consensus estimate of $3.65 by $0.48. Microsoft had a net margin of 35.71% and a return on equity of 32.45%. The business had revenue of $77.67 billion for the quarter, compared to analysts’ expectations of $75.49 billion. During the same quarter last year, the company posted $3.30 earnings per share. The company’s quarterly revenue was up 18.4% compared to the same quarter last year. As a group, research analysts expect that Microsoft will post 13.08 EPS for the current fiscal year.

Insider Activity

In related news, CEO Judson Althoff sold 12,750 shares of Microsoft stock in a transaction dated 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 sale, the chief executive officer directly owned 129,349 shares in the company, valued at $63,577,620.48. The trade was a 8.97% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Bradford L. Smith sold 38,500 shares of the stock in a transaction dated Monday, November 3rd. The shares were sold at an average price of $518.64, for a total transaction of $19,967,640.00. Following the completion of the transaction, the insider owned 461,597 shares of the company’s stock, valued at $239,402,668.08. This represents a 7.70% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 54,100 shares of company stock valued at $27,598,872. Company insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

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

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Maia 200 AI chip launch: Microsoft unveiled a second‑generation inference accelerator that management says cuts inference cost and power per query — a direct lever to improve Azure/Copilot margins as AI usage scales. Read More.
• Positive Sentiment: Large data‑center approvals: Mount Pleasant, Wis., board approved plans for 15 additional data centers (multi‑billion dollar project); expands capacity to meet AI demand and supports long‑term Azure revenue growth. Read More.
• Positive Sentiment: Strong cloud / AI momentum into earnings: Multiple previews highlight robust Azure growth and Copilot monetization as the primary upside drivers for revenue and guidance sensitivity. Investors expect management commentary on monetization and backlog. Read More.
• Neutral Sentiment: Market positioning ahead of Q2: Analysts and traders are pricing in a high‑expectations earnings event where forward guidance will likely matter more than the headline quarter. Watch capex/guidance language. Read More.
• Neutral Sentiment: Shareholder returns: Microsoft announced its first 2026 dividend payment date — supports income investors but has limited near‑term price impact vs. AI narrative. Read More.
• Negative Sentiment: Analyst concern on margins/CAPEX: Stifel lowered its price target citing near‑term margin pressure from elevated AI spend; other firms have trimmed targets or reiterated caution ahead of guidance. That raises downside risk if management signals continued heavy spend. Read More.
• Negative Sentiment: Environmental & regulatory/ESG scrutiny: Reporting flags rising water use at AI data centers — a potential regulatory/community constraint and reputational risk that could affect future site approvals and costs. Read More.
• Negative Sentiment: Legal/third‑party AI risk: A class action tied to an AI hiring tool used by Big Tech (including Microsoft customers) underscores litigation and compliance risks around AI deployments. Read More.

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).