Microsoft (NASDAQ:MSFT) Stock Price Down 2.2% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) shares dropped 2.2% during mid-day trading on Thursday . The stock traded as low as $377.39 and last traded at $381.58. 30,199,237 shares traded hands during mid-day trading, a decline of 19% from the average daily volume of 37,203,578 shares. The stock had previously closed at $390.34.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft joined 25 tech companies in urging U.S. policymakers not to impose broad restrictions on open-weight and open-source AI models, a stance that supports its broader AI ecosystem strategy and could help preserve flexibility for future product development. Reuters article
• Positive Sentiment: Microsoft also backed a coalition letter with Nvidia, Meta, and other firms arguing that open-weight AI is important for U.S. leadership, reinforcing investor confidence that the company remains a major AI platform player rather than being boxed into one model provider. Business Insider article
• Positive Sentiment: Microsoft’s expanded Databricks partnership extends a key cloud/data-AI relationship through the 2030s, which should help Azure adoption and strengthen long-term enterprise demand for Microsoft’s cloud services. TipRanks article
• Neutral Sentiment: Several previews ahead of Microsoft’s July 29 earnings report say the big investor focus will be FY2027 CapEx guidance and Azure growth, with analysts expecting strong results but worrying that AI infrastructure spending could weigh on free cash flow and margins. MarketBeat article
• Negative Sentiment: Multiple law firms issued class-action alerts and deadline reminders tied to Microsoft securities-fraud claims, including allegations related to Copilot disclosures, which adds headline risk and may keep some investors cautious into earnings. GlobeNewswire article
• Negative Sentiment: Broader tech weakness tied to AI spending fears also weighed on Microsoft, as investors sold mega-cap names after seeing massive capital outlays across the sector and questioning near-term returns on AI investment. Fox Business article

Analyst Ratings Changes

Several research firms recently commented on MSFT. Citizens Jmp started coverage on shares of Microsoft in a report on Monday, June 1st. They set an “outperform” rating and a $550.00 target price on the stock. Wells Fargo & Company cut their price target on shares of Microsoft from $650.00 to $625.00 and set an “overweight” rating for the company in a research report on Wednesday, July 15th. Sanford C. Bernstein reiterated an “outperform” rating and issued a $646.00 price objective on shares of Microsoft in a report on Wednesday. Mizuho lowered their target price on Microsoft from $515.00 to $490.00 and set an “outperform” rating for the company in a research note on Wednesday, July 15th. Finally, Raymond James Financial cut Microsoft from a “market perform” rating to a “market perform” rating in a report on Tuesday, May 5th. Forty-two equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $555.40.

Microsoft Trading Up 0.0%

The company has a debt-to-equity ratio of 0.08, a current ratio of 1.28 and a quick ratio of 1.27. The firm’s 50 day moving average price is $398.21 and its 200 day moving average price is $408.08. The stock has a market capitalization of $2.84 trillion, a P/E ratio of 22.72, a P/E/G ratio of 1.17 and a beta of 1.13.

Microsoft (NASDAQ:MSFT) last posted its 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 company had revenue of $82.89 billion for the quarter, compared to analysts’ expectations of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.Microsoft’s quarterly revenue was up 18.3% on a year-over-year basis. During the same period last year, the firm earned $3.46 earnings per share. As a group, equities research analysts expect that Microsoft Corporation will post 16.7 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Investors of record on Thursday, August 20th will be issued a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a dividend yield of 1.0%. The ex-dividend date is Thursday, August 20th. Microsoft’s dividend payout ratio is currently 21.67%.

Insider Buying and Selling

In other Microsoft news, EVP Takeshi Numoto sold 4,500 shares of the business’s stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $402.84, for a total transaction of $1,812,780.00. Following the transaction, the executive vice president directly owned 47,468 shares of the company’s stock, valued at approximately $19,122,009.12. The trade was a 8.66% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Amy Coleman sold 1,262 shares of the company’s stock in a transaction on Thursday, May 14th. The stock was 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 owned 46,003 shares of the company’s stock, valued at $18,922,874.02. This trade represents a 2.67% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 23,762 shares of company stock valued at $10,508,361 over the last quarter. 0.03% of the stock is owned by company insiders.

Institutional Trading of Microsoft

Several large investors have recently bought and sold shares of the company. Longfellow Investment Management Co. LLC grew its position in shares of Microsoft by 51.3% in the 2nd 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 during the period. Bernzott Capital Advisors bought a new stake in Microsoft during the fourth quarter worth about $34,000. Frankly Finances LLC purchased a new stake in Microsoft in the second quarter worth about $35,000. Timmons Wealth Management LLC bought a new position in shares of Microsoft during the fourth quarter valued at approximately $36,000. Finally, Fairway Wealth LLC lifted its holdings in shares of Microsoft by 287.0% during the fourth quarter. Fairway Wealth LLC now owns 89 shares of the software giant’s stock valued at $43,000 after purchasing an additional 66 shares during the last quarter. 71.13% of the stock is owned by institutional investors.

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).