Microsoft (NASDAQ:MSFT) Shares Down 4.1% - Time to Sell?

Key Points

• Microsoft shares fell 4.1% in mid-day trading Tuesday, with unusually heavy volume of 53.3 million shares, well above the average session volume. The stock traded as low as $458.27 before last changing hands at $441.50.
• Despite the pullback, recent news around Microsoft has been AI-focused and positive, including new AI tools unveiled at Build and a healthcare AI collaboration with Mayo Clinic. Analysts also expect the company’s AI roadmap to support Azure and Copilot adoption.
• Wall Street remains broadly bullish: 40 analysts rate Microsoft a Buy and the consensus price target is $561.20, even though several firms recently trimmed targets. The company also beat last quarter’s earnings and revenue estimates, underscoring strong fundamental performance.

Shares of Microsoft Corporation (NASDAQ:MSFT - Get Free Report) traded down 4.1% during mid-day trading on Tuesday . The stock traded as low as $458.27 and last traded at $441.5030. 53,251,579 shares were traded during mid-day trading, an increase of 60% from the average session volume of 33,379,130 shares. The stock had previously closed at $460.52.

Microsoft News Roundup

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

Wall Street Analysts Forecast Growth

A number of equities research analysts recently commented on the stock. Daiwa Securities Group dropped their price objective on shares of Microsoft from $630.00 to $600.00 and set a "buy" rating on the stock in a report on Wednesday, February 4th. Oppenheimer reiterated an "outperform" rating and set a $515.00 target price (down from $630.00) on shares of Microsoft in a report on Monday, April 27th. BMO Capital Markets dropped their price target on Microsoft from $575.00 to $505.00 and set an "outperform" rating on the stock in a research note on Tuesday, April 28th. BNP Paribas Exane cut their price target on Microsoft from $556.00 to $555.00 and set an "outperform" rating on the stock in a report on Friday, May 1st. Finally, UBS Group reaffirmed a "buy" rating on shares of Microsoft in a research report on Friday, April 24th. Forty analysts have rated the stock with a Buy rating and seven have given a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and an average price target of $561.20.

Microsoft Trading Down 4.1%

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

Microsoft (NASDAQ:MSFT - Get Free Report) last released its earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share 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 analysts' expectations of $81.44 billion. Microsoft had a return on equity of 31.94% and a net margin of 39.34%.The company's quarterly revenue was up 18.3% on a year-over-year basis. During the same period in the prior year, the company earned $3.46 earnings per share. As a group, equities analysts anticipate that Microsoft Corporation will post 16.76 EPS for the current year.

Microsoft Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be paid a dividend of $0.91 per share. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date of this dividend is Thursday, May 21st. Microsoft's dividend payout ratio (DPR) is currently 21.67%.

Insider Buying and Selling at Microsoft

In other news, EVP Kathleen T. Hogan sold 12,321 shares of the firm'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 transaction of $5,045,695.92. Following the completion of the sale, the executive vice president owned 137,933 shares of the company's stock, valued at $56,486,322.16. This trade represents a 8.20% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, EVP Amy Coleman sold 1,262 shares of the business's stock in a transaction on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total transaction of $519,111.08. Following the transaction, the executive vice president owned 46,003 shares in the company, valued at $18,922,874.02. The trade was a 2.67% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.03% of the stock is owned by insiders.

Hedge Funds Weigh In On Microsoft

Several institutional investors have recently made changes to their positions in MSFT. Longfellow Investment Management Co. LLC grew its holdings 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 valued at $29,000 after acquiring an additional 20 shares in the last quarter. Bernzott Capital Advisors bought a new stake in Microsoft during the fourth quarter worth $34,000. Timmons Wealth Management LLC purchased a new position in Microsoft in the fourth quarter worth $36,000. Fairway Wealth LLC boosted its position in 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 purchasing an additional 66 shares during the last quarter. Finally, LSV Asset Management bought a new position in Microsoft in the 4th quarter valued at $44,000. Institutional investors and hedge funds 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).

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