Microsoft (NASDAQ:MSFT) Stock Price Down 3.8% - Time to Sell?

Key Points

• Microsoft shares fell 3.8% on Wednesday, trading as low as $377.32 amid heavier-than-normal volume before closing at $378.91, well below the prior close of $393.83.
• Despite the drop, Microsoft continues to draw bullish long-term AI commentary and still has a consensus analyst rating of “Moderate Buy” with an average price target of $561.20.
• Investors are also weighing new risks, including a collapsed Oracle cloud infrastructure deal and a shareholder class-action lawsuit over alleged misstatements about Azure, Copilot, and AI spending.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) shares were down 3.8% on Wednesday . The stock traded as low as $377.32 and last traded at $378.91. Approximately 41,265,920 shares changed hands during trading, an increase of 15% from the average daily volume of 35,856,289 shares. The stock had previously closed at $393.83.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft continues to expand AI-related partnerships, including Dstillery’s launch of predictive AI audiences in Microsoft Advertising’s Media Marketplace, which supports monetization of its ad platform and broader AI ecosystem. Dstillery Brings Predictive AI Audiences to Microsoft Media Marketplace as Launch Partner
• Positive Sentiment: Several commentators argued Microsoft remains a strong long-term AI compounder, with one note saying AI adoption is still a major growth driver and another saying the stock could be attractive on weakness. Microsoft Is Winning the AI Adoption Game. Now It Has to Pay Off
• Positive Sentiment: Analysts and bullish articles continue to point to Microsoft’s long-term earnings power, including reports that its AI revenue is still rising and that the company remains a top growth stock over time. Microsoft: Growth Outlook Still Robust Without OpenAI Exclusivity
• Neutral Sentiment: Some media coverage framed Microsoft as a long-term quality stock and compared it favorably to other AI names, but these pieces were mostly opinion-driven rather than company-specific catalysts. Microsoft in 2026: Still the Smartest Way to Play the AI Boom?
• Negative Sentiment: Multiple reports said Microsoft walked away from a potential $3 billion Oracle cloud infrastructure deal, highlighting ongoing capacity and security/compliance issues in its cloud buildout. Microsoft's cloud infrastructure talks with Oracle collapse
• Negative Sentiment: Microsoft is also facing a shareholder class-action lawsuit tied to alleged misstatements about Azure growth, Copilot adoption, and AI infrastructure spending, which adds legal risk and keeps pressure on the stock. Securities Fraud Class Action Notice
• Negative Sentiment: Several analyst articles turned bearish, warning that Microsoft may be “cheap for a reason” and recommending investors sell or dump the shares after the recent weakness. Why This Analyst Is Telling Investors to Dump Microsoft Stock (MSFT)

Analysts Set New Price Targets

Several brokerages have commented on MSFT. New Street Research decreased their price target on shares of Microsoft from $675.00 to $600.00 and set a "buy" rating for the company in a research report on Thursday, April 30th. Dbs Bank dropped their price objective on shares of Microsoft from $678.00 to $573.00 in a research note on Thursday, May 7th. HSBC dropped their price target on shares of Microsoft from $593.00 to $571.00 in a research note on Thursday, April 30th. DZ Bank reiterated a "buy" rating on shares of Microsoft in a research note on Thursday, April 30th. Finally, Benchmark reissued a "buy" rating and set a $525.00 price objective (up from $450.00) on shares of Microsoft in a report on Tuesday, April 28th. Forty-one investment analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $561.20.

Microsoft Stock Down 3.8%

The company has a market cap of $2.81 trillion, a PE ratio of 22.55, a P/E/G ratio of 1.44 and a beta of 1.11. 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 firm's fifty day simple moving average is $412.01 and its 200-day simple moving average is $427.45.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its quarterly earnings results on Wednesday, April 29th. The software giant reported $4.27 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.06 by $0.21. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company had revenue of $82.89 billion for the quarter, compared to the consensus estimate of $81.44 billion. During the same quarter in the prior year, the firm earned $3.46 earnings per share. The company's revenue for the quarter was up 18.3% compared to the same quarter last year. As a group, equities research analysts expect that Microsoft Corporation will post 16.76 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

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

Insider Buying and Selling

In related news, EVP Takeshi Numoto sold 4,500 shares of the firm's stock in a transaction that occurred 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 sale, the executive vice president owned 47,468 shares in the company, valued at approximately $19,122,009.12. This trade represents a 8.66% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP Amy Coleman sold 1,262 shares of the firm's stock in a transaction that occurred 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 sale, the executive vice president owned 46,003 shares in the company, valued at approximately $18,922,874.02. This trade represents a 2.67% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 23,762 shares of company stock worth $10,508,361. 0.03% of the stock is owned by insiders.

Institutional Trading of Microsoft

A number of hedge funds have recently bought and sold shares of the company. WFA Asset Management Corp boosted its holdings in shares of Microsoft by 27.0% in the 1st quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock valued at $427,000 after purchasing an additional 216 shares during the last quarter. Ironwood Wealth Management LLC. raised its stake in shares of Microsoft by 0.3% in the 2nd quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock valued at $5,658,000 after acquiring an additional 38 shares during the period. Discipline Wealth Solutions LLC raised its stake in shares of Microsoft by 410.4% in the 3rd quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock valued at $1,144,000 after acquiring an additional 2,138 shares during the period. Wealth Group Ltd. raised its stake in shares of Microsoft by 1.2% in the 4th quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant's stock valued at $1,000,000 after acquiring an additional 28 shares during the period. Finally, Eagle Capital Management LLC raised its stake in shares of Microsoft by 0.4% in the 4th quarter. Eagle Capital Management LLC now owns 23,097 shares of the software giant's stock valued at $9,735,000 after acquiring an additional 96 shares during the period. Institutional investors and hedge funds own 71.13% of the company's stock.

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).

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