Microsoft (NASDAQ:MSFT) Shares Down 3% – Should You Sell?

Microsoft Corporation (NASDAQ:MSFT) traded down 3% during mid-day trading on Monday . The company traded as low as $478.41 and last traded at $480.35. 28,331,360 shares were traded during trading, a decline of 24% from the average session volume of 37,466,953 shares. The stock had previously closed at $495.40.

Key Microsoft News

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Microsoft’s proprietary AI chips are reportedly delivering efficiency gains of up to 40% versus relying solely on OpenAI technology. Greater use of internally developed hardware could reduce infrastructure costs and improve margins as AI demand expands. Satya Nadella Said Microsoft’s Own AI Chips Are Driving Up to 40% Efficiency Gains
• Positive Sentiment: Recent coverage continues to highlight Azure’s crossing of $100 billion in annual revenue and Microsoft 365 Copilot surpassing 30 million paid seats. Those milestones reinforce expectations for sustained cloud and AI-led revenue growth. Price Prediction: One Number Could Decide How High Microsoft Goes in 2027
• Positive Sentiment: Microsoft is deepening its relationship with AMD for AI infrastructure, while enterprise partners continue expanding deployments through Azure and the Microsoft Marketplace. These developments support demand for Microsoft’s cloud ecosystem and provide additional hardware supply options. Microsoft Just Announced Great News for AMD Investors

Analyst Ratings Changes

Several analysts have commented on the company. Stifel Nicolaus upped their price objective on Microsoft from $400.00 to $450.00 and gave the company a “hold” rating in a research note on Thursday, July 30th. DA Davidson reissued a “buy” rating and issued a $550.00 target price on shares of Microsoft in a report on Thursday, July 30th. Piper Sandler upped their price target on Microsoft from $540.00 to $550.00 and gave the stock an “overweight” rating in a research note on Tuesday, July 28th. Cantor Fitzgerald increased their price target on Microsoft from $502.00 to $522.00 and gave the stock an “overweight” rating in a report on Monday, July 27th. Finally, China Renaissance dropped their price objective on shares of Microsoft from $630.00 to $550.00 and set a “buy” rating on the stock in a research note on Monday, May 4th. Forty-two analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $560.27.

Microsoft Stock Performance

The stock has a 50 day moving average of $414.21 and a two-hundred day moving average of $408.06. The stock has a market capitalization of $3.58 trillion, a PE ratio of 26.82, a P/E/G ratio of 1.59 and a beta of 1.10. The company has a debt-to-equity ratio of 0.07, a current ratio of 1.23 and a quick ratio of 1.22.

Microsoft (NASDAQ:MSFT) last released its earnings results on Wednesday, July 29th. The software giant reported $4.74 EPS for the quarter, beating analysts’ consensus estimates of $4.24 by $0.50. The company had revenue of $90.01 billion during the quarter, compared to the consensus estimate of $87.62 billion. Microsoft had a return on equity of 31.98% and a net margin of 40.31%.Microsoft’s quarterly revenue was up 17.7% compared to the same quarter last year. During the same quarter last year, the company earned $3.65 earnings per share. Research analysts expect that Microsoft Corporation will post 19.59 EPS for the current fiscal year.

Microsoft Announces Dividend

The business also recently disclosed 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. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $3.64 dividend on an annualized basis and a yield of 0.8%. Microsoft’s payout ratio is currently 20.27%.

Insider Buying and Selling

In other news, CEO Judson Althoff sold 10,000 shares of the business’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $487.89, for a total transaction of $4,878,900.00. Following the sale, the chief executive officer owned 100,447 shares of the company’s stock, valued at $49,007,086.83. The trade was a 9.05% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, EVP Takeshi Numoto sold 4,810 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $496.48, for a total value of $2,388,068.80. Following the completion of the sale, the executive vice president owned 42,677 shares in the company, valued at approximately $21,188,276.96. This represents a 10.13% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders have sold 37,310 shares of company stock valued at $17,256,219. Insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Longfellow Investment Management Co. LLC increased its position in Microsoft by 51.3% during the second quarter. Longfellow Investment Management Co. LLC now owns 59 shares of the software giant’s stock worth $29,000 after purchasing an additional 20 shares during the last quarter. Bernzott Capital Advisors purchased a new stake in shares of Microsoft during the 4th quarter valued at $34,000. Frankly Finances LLC acquired a new stake in shares of Microsoft during the 2nd quarter worth $35,000. Timmons Wealth Management LLC acquired a new stake in shares of Microsoft during the 4th quarter worth $36,000. Finally, Bard Associates Inc. acquired a new position in Microsoft in the second quarter valued at $37,000. 71.13% of the stock is currently owned by hedge funds and other institutional investors.

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).