Wedbush Issues Pessimistic Forecast for Microsoft (NASDAQ:MSFT) Stock Price

Key Points

• Wedbush trimmed its price target on Microsoft to $575 from $625 but kept an "outperform" rating, implying about a 34% upside; the consensus analyst target is $601 with a "Moderate Buy" average (1 Strong Buy, 38 Buy, 3 Hold).
• Microsoft beat the quarter (EPS $4.14 vs. $3.86; revenue $81.27B vs. $80.28B and Microsoft Cloud topped $50B) but the stock slid $52.56 to $429.07 after investors reacted to record capex (> $37B), heavy AI/data‑center spending and signs of slowing Azure growth.
• The company has seen notable insider selling

Microsoft (NASDAQ:MSFT - Get Free Report) had its price objective reduced by research analysts at Wedbush from $625.00 to $575.00 in a research note issued on Thursday, MarketBeat Ratings reports. The brokerage presently has an "outperform" rating on the software giant's stock. Wedbush's price objective suggests a potential upside of 34.01% from the company's current price.

Other research analysts have also issued research reports about the company. UBS Group decreased their price objective on Microsoft from $650.00 to $600.00 and set a "buy" rating on the stock in a report on Friday, January 23rd. Robert W. Baird set a $540.00 price target on shares of Microsoft and gave the stock an "outperform" rating in a research report on Thursday. Barclays reiterated an "overweight" rating and issued a $600.00 price objective (down previously from $610.00) on shares of Microsoft in a report on Thursday. Piper Sandler restated an "overweight" rating and set a $600.00 target price (down from $650.00) on shares of Microsoft in a report on Thursday. Finally, Bank of America cut their price target on Microsoft from $640.00 to $520.00 and set a "buy" rating for the company in a report on Monday. One analyst has rated the stock with a Strong Buy rating, thirty-eight have given a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $601.00.

Microsoft Price Performance

MSFT stock traded down $52.56 during trading on Thursday, hitting $429.07. The stock had a trading volume of 26,402,321 shares, compared to its average volume of 26,422,932. Microsoft has a twelve month low of $344.79 and a twelve month high of $555.45. The company's 50-day moving average price is $477.57 and its two-hundred day moving average price is $500.68. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39. The stock has a market capitalization of $3.19 trillion, a P/E ratio of 30.19, a PEG ratio of 1.94 and a beta of 1.07.

Microsoft (NASDAQ:MSFT - Get Free Report) last announced its earnings results on Wednesday, January 28th. The software giant reported $4.14 EPS for the quarter, beating analysts' consensus estimates of $3.86 by $0.28. The business had revenue of $81.27 billion during the quarter, compared to analysts' expectations of $80.28 billion. Microsoft had a return on equity of 32.45% and a net margin of 35.71%.The business's revenue was up 16.7% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $3.23 earnings per share. As a group, research analysts predict that Microsoft will post 13.08 EPS for the current fiscal year.

Insider Activity

In related news, insider Bradford L. Smith sold 38,500 shares of the stock in a transaction that occurred on Monday, November 3rd. The shares were sold at an average price of $518.64, for a total transaction of $19,967,640.00. Following the completion of the transaction, the insider owned 461,597 shares of the company's stock, valued at approximately $239,402,668.08. This trade represents a 7.70% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, EVP Takeshi Numoto sold 2,850 shares of the business's stock in a transaction that occurred on Thursday, December 4th. The shares were sold at an average price of $478.72, for a total value of $1,364,352.00. Following the completion of the sale, the executive vice president directly owned 55,782 shares in the company, valued at approximately $26,703,959.04. The trade was a 4.86% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 54,100 shares of company stock valued at $27,598,872. Company insiders own 0.03% of the company's stock.

Hedge Funds Weigh In On Microsoft

Institutional investors have recently bought and sold shares of the company. WFA Asset Management Corp grew its position in shares of Microsoft by 27.0% during the first quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock worth $427,000 after buying an additional 216 shares in the last quarter. Ironwood Wealth Management LLC. lifted its stake in Microsoft by 0.3% in the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock worth $5,658,000 after acquiring an additional 38 shares during the last quarter. Discipline Wealth Solutions LLC grew its holdings in Microsoft by 410.4% during the 3rd quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock worth $1,144,000 after acquiring an additional 2,138 shares in the last quarter. Wealth Group Ltd. increased its position 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 purchasing an additional 28 shares during the last quarter. Finally, Eagle Capital Management LLC raised its holdings 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 purchasing an additional 96 shares in the last quarter. 71.13% of the stock is owned by institutional investors and hedge funds.

Key Stories Impacting Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Beat on top and bottom lines — Microsoft delivered stronger-than-expected EPS and revenue, and Microsoft Cloud (Azure + related) topped $50B quarterly, validating demand for AI/cloud services. Read More.
• Positive Sentiment: OpenAI/contract backlog lifts future revenue visibility — Microsoft reported a large contracted backlog and meaningful direct OpenAI-related gains, increasing booked future revenue (RPO/backlog). This supports medium-term Azure growth expectations. Read More.
• Positive Sentiment: Strategic AI investments and product moves — New Maia 200 AI chip, multiple data-center approvals and AI co‑innovation partnerships keep Microsoft positioned competitively in infrastructure and enterprise AI monetization. (Analysts at some shops reiterated/raised targets.) Read More.
• Neutral Sentiment: Mixed analyst reactions — Some firms trimmed near-term price targets or noted margin pressure, while others raised targets or kept Buy ratings; the net effect is divergent views that can widen intraday moves. Read More.
• Neutral Sentiment: Macro and sector context — Tech peers (e.g., Meta) showed clearer near-term AI payoff in ad revenue, which accentuated the market’s comparison between AI spending vs. visible monetization. That relative performance is driving rotation within mega-cap tech. Read More.
• Negative Sentiment: Record capex and AI spending worried investors — Microsoft disclosed very large capital expenditures and data-center spending (reported >$37B capex), raising concerns that heavy near-term investment is outpacing visible revenue/margin improvement. Read More.
• Negative Sentiment: Slowing Azure growth vs. expectations — Azure/cloud growth decelerated vs. prior quarters (investors wanted acceleration given the spending surge), prompting sell-side and quant repricing and the after‑hours pullback. Read More.
• Negative Sentiment: Market punished stock despite beat — Coverage and commentary (Forbes, Bloomberg, CNBC summaries) emphasize that investors now demand clearer, near-term proof that AI investments will translate into faster revenue and margin expansion; that skepticism drove the immediate selloff. Read More.

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).

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.