Microsoft (NASDAQ:MSFT) Trading Down 2.7% - Here's What Happened

Key Points

• Microsoft shares fell 2.7% on Friday, trading as low as $414.40 after closing at $428.05 the prior session, with volume slightly below average.
• AI remains the main growth driver: the article says Microsoft’s AI revenue run rate has reportedly topped $37 billion, and analysts highlighted Build 2026 as evidence that Azure, Copilot, and enterprise AI tools are strengthening the company’s position.
• Wall Street still leans bullish despite some target cuts, with 41 analysts rating the stock a Buy, an average target price of $561.20, and notable firms like TD Cowen and Jefferies reiterating constructive views on Microsoft’s AI strategy.

Microsoft Corporation (NASDAQ:MSFT - Get Free Report) was down 2.7% on Friday . The stock traded as low as $414.40 and last traded at $416.67. Approximately 33,880,462 shares were traded during trading, a decline of 5% from the average daily volume of 35,843,449 shares. The stock had previously closed at $428.05.

Key Headlines Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s AI revenue run rate reportedly crossed $37 billion, reinforcing that Azure, Copilot, and other AI offerings are contributing real growth. Microsoft's AI Revenue Run Rate Just Crossed $37 Billion. Is It the Best AI Stock to Buy Now?
• Positive Sentiment: Analysts remain constructive after Build 2026, pointing to new proprietary AI models, agent tools, Windows upgrades, and quantum progress as signs Microsoft is strengthening its enterprise AI platform. Analysts Say Buy Microsoft Stock (MSFT) after Build 2026 Reinforces AI Growth Story
• Positive Sentiment: TD Cowen and other firms reiterated bullish views, with price targets well above the current share price, suggesting Wall Street still sees upside if AI execution stays strong. Microsoft had its "buy" rating reaffirmed by TD Cowen
• Positive Sentiment: Jefferies also praised Microsoft’s model-agnostic AI strategy, saying its enterprise platform and governance tools could help it win more corporate AI workloads. Microsoft's model-agnostic AI strategy earns praise from Jefferies

Analyst Ratings Changes

MSFT has been the subject of a number of research analyst reports. New Street Research lowered their price target on Microsoft from $675.00 to $600.00 and set a "buy" rating for the company in a report on Thursday, April 30th. BMO Capital Markets reduced their price objective on Microsoft from $575.00 to $505.00 and set an "outperform" rating on the stock in a research note on Tuesday, April 28th. Truist Financial decreased their target price on Microsoft from $675.00 to $575.00 and set a "buy" rating on the stock in a research report on Thursday, April 30th. Oppenheimer reissued an "outperform" rating and set a $515.00 target price (down from $630.00) on shares of Microsoft in a research note on Monday, April 27th. Finally, Scotiabank dropped their target price on shares of Microsoft from $600.00 to $550.00 and set an "outperform" rating for the company in a report on Thursday, April 30th. Forty-one equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, Microsoft currently has an average rating of "Moderate Buy" and an average target price of $561.20.

Microsoft Trading Down 2.7%

The business's fifty day moving average is $406.72 and its 200-day moving average is $432.18. 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 firm has a market cap of $3.10 trillion, a P/E ratio of 24.80, a price-to-earnings-growth ratio of 1.54 and a beta of 1.11.

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. The firm had revenue of $82.89 billion during the quarter, compared to analysts' expectations of $81.44 billion. Microsoft had a net margin of 39.34% and a return on equity of 31.94%. The company's revenue was up 18.3% on a year-over-year basis. During the same period in the prior year, the company posted $3.46 EPS. Analysts predict that Microsoft Corporation will post 16.76 EPS for the current year.

Microsoft Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Thursday, May 21st will be issued a dividend of $0.91 per share. The ex-dividend date of this dividend is Thursday, May 21st. This represents a $3.64 annualized dividend and a yield of 0.9%. Microsoft's payout ratio is presently 21.67%.

Insider Transactions at Microsoft

In other news, EVP Amy Coleman sold 1,262 shares of the company's stock in a transaction on Thursday, May 14th. The shares were sold at an average price of $411.34, for a total value of $519,111.08. Following the sale, 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 position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CEO Judson Althoff sold 15,500 shares of the stock in a transaction on Monday, June 1st. The stock was sold at an average price of $460.99, for a total transaction of $7,145,345.00. Following the sale, the chief executive officer owned 110,477 shares of the company's stock, valued at approximately $50,928,792.23. This trade represents a 12.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders own 0.03% of the company's stock.

Hedge Funds Weigh In On Microsoft

Hedge funds and other institutional investors have recently bought and sold shares of the company. Norges Bank acquired a new position in shares of Microsoft during the 4th quarter valued at $50,664,631,000. Auto Owners Insurance Co grew its holdings in Microsoft by 56,160.8% in the fourth quarter. Auto Owners Insurance Co now owns 60,116,384 shares of the software giant's stock worth $29,073,486,000 after purchasing an additional 60,009,531 shares during the period. Nuveen LLC bought a new stake in Microsoft in the first quarter valued at $18,733,827,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its stake in Microsoft by 500.0% in the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 59,543,261 shares of the software giant's stock valued at $30,840,432,000 after purchasing an additional 49,618,571 shares in the last quarter. Finally, Laurel Wealth Advisors LLC raised its holdings in shares of Microsoft by 49,640.3% during the second quarter. Laurel Wealth Advisors LLC now owns 29,967,038 shares of the software giant's stock valued at $14,905,904,000 after purchasing an additional 29,906,791 shares during the period. 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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