Microsoft (NASDAQ:MSFT) Shares Down 4.1% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT)’s stock price dropped 4.1% during trading on Tuesday . The company traded as low as $458.27 and last traded at $441.5030. Approximately 53,251,579 shares changed hands during mid-day trading, an increase of 60% from the average daily volume of 33,379,130 shares. The stock had previously closed at $460.52.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft unveiled new AI tools at Build, including a proprietary coding model (MAI-Code-1), a personal assistant, and developer tools for testing AI behavior—signals that Microsoft is deepening its AI platform and monetization opportunities. Article: Microsoft unveils new AI models to lessen reliance on OpenAI and lower costs for developers
• Positive Sentiment: Microsoft and Mayo Clinic announced a collaboration to build a frontier healthcare AI model, expanding Microsoft’s reach into regulated, high-value enterprise use cases. Article: Mayo Clinic and Microsoft collaborate to develop a frontier AI model for healthcare
• Positive Sentiment: Investor sentiment has also been helped by broader optimism around Microsoft’s AI roadmap, including new PC and cloud tools expected to be showcased at Build, which could support Azure and Copilot adoption. Article: Microsoft expected to showcase new PC, cloud AI tools at developer conference

Analysts Set New Price Targets

Several research analysts have recently weighed in on MSFT shares. Evercore cut their price target on Microsoft from $580.00 to $510.00 and set an “outperform” rating for the company in a research note on Thursday, April 30th. Piper Sandler restated an “overweight” rating on shares of Microsoft in a research note on Tuesday, May 26th. Scotiabank cut their target price on shares of Microsoft from $600.00 to $550.00 and set an “outperform” rating for the company in a research report on Thursday, April 30th. Truist Financial reduced their target price on shares of Microsoft from $675.00 to $575.00 and set a “buy” rating for the company in a research note on Thursday, April 30th. Finally, Daiwa Securities Group lowered their price target on shares of Microsoft from $630.00 to $600.00 and set a “buy” rating on the stock in a research report on Wednesday, February 4th. Forty research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $561.20.

Microsoft Price Performance

The firm’s 50-day moving average is $403.52 and its 200-day moving average is $433.78. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.08. The company has a market capitalization of $3.28 trillion, a PE ratio of 26.28, a price-to-earnings-growth ratio of 1.62 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.06 by $0.21. The firm had revenue of $82.89 billion during the quarter, compared to analyst estimates of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company’s revenue was up 18.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $3.46 earnings per share. Equities analysts predict that Microsoft Corporation will post 16.76 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be given a $0.91 dividend. The ex-dividend date is Thursday, May 21st. This represents a $3.64 annualized dividend and a yield of 0.8%. Microsoft’s payout ratio is presently 21.67%.

Insiders Place Their Bets

In other news, EVP Amy Coleman sold 1,262 shares of the company’s stock in a transaction dated Thursday, May 14th. The shares were sold at an average price of $411.34, for a total transaction of $519,111.08. Following the completion of the transaction, the executive vice president directly owned 46,003 shares of the company’s stock, valued at approximately $18,922,874.02. This represents a 2.67% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, EVP Kathleen T. Hogan sold 12,321 shares of the company’s stock in a transaction that occurred on Friday, March 6th. The shares were sold at an average price of $409.52, for a total value of $5,045,695.92. Following the transaction, the executive vice president directly owned 137,933 shares of the company’s stock, valued at $56,486,322.16. The trade was a 8.20% decrease in their position. The disclosure for this sale is available in the SEC filing. 0.03% of the stock is owned by company insiders.

Hedge Funds Weigh In On Microsoft

Institutional investors and hedge funds have recently made changes to their positions in the business. Longfellow Investment Management Co. LLC grew its position in 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 purchasing an additional 20 shares during the last quarter. Bernzott Capital Advisors purchased a new position in Microsoft in the fourth quarter worth about $34,000. Timmons Wealth Management LLC bought a new position in shares of Microsoft in the fourth quarter worth approximately $36,000. Fairway Wealth LLC lifted its stake in shares of Microsoft by 287.0% in the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock worth $43,000 after buying an additional 66 shares in the last quarter. Finally, LSV Asset Management purchased a new stake in shares of Microsoft during the fourth quarter valued at approximately $44,000. 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).