Microsoft (NASDAQ:MSFT) Shares Down 2% – Here’s Why

Microsoft Corporation (NASDAQ:MSFT) shares traded down 2% during trading on Friday . The stock traded as low as $499.36 and last traded at $499.70. 17,391,665 shares were traded during trading, a decline of 52% from the average daily volume of 36,196,594 shares. The stock had previously closed at $510.12.

Microsoft News Summary

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Azure revenue grew 43% to approximately $29.4 billion in the quarter and reached $101.9 billion for fiscal 2026. Microsoft also reported quarterly revenue of $90.01 billion, up 17.7% year over year, while its remaining performance obligations surged 84% to $678 billion. MSFT Has Gone Nowhere in 2026—Azure Says That’s a Mistake
• Positive Sentiment: Microsoft’s decision to disclose Azure sales directly and reorganize its reporting into “Agents and Infra” and “Devices and Consumer” should give investors greater visibility into AI and cloud performance. Microsoft to reveal Azure cloud sales in financial reporting shift
• Positive Sentiment: Stifel raised its price target, citing improving Copilot adoption and AI execution. Microsoft also said Azure customers are already using OpenAI’s new Astra model, reinforcing the strategic value of its cloud platform. Microsoft in spotlight as Stifel ups price target on Copilot, AI improvement
• Neutral Sentiment: Commentators including Jim Cramer continue to describe large-cap AI leaders as attractive, but opinions vary on whether Microsoft’s valuation adequately reflects execution and spending risks. Cramer Says the Magnificent Seven Are Finally Cheap
• Negative Sentiment: Investors remain concerned about Microsoft’s approximately $41 billion quarterly capital expenditure and plans for continued heavy AI infrastructure investment. Falling cloud gross margins and uncertain returns on data centers, chips and power could limit earnings growth even as revenue expands. Microsoft Stock Breaks $500 as Spending Fears Grow
• Negative Sentiment: CEO Satya Nadella sold 86,525 shares worth about $43.4 million. The sale was executed under a pre-arranged Rule 10b5-1 plan, reducing its signaling value, but it can still weigh modestly on sentiment. Microsoft CEO Nadella Sells $43 Million of Stock
• Negative Sentiment: Microsoft is ending unlimited Xbox cloud gaming for Game Pass subscribers and imposing monthly usage limits as infrastructure costs rise. The move may improve economics but risks customer dissatisfaction and highlights pressure in the gaming business. Microsoft to impose time limits on Xbox cloud gaming subscribers

Wall Street Analysts Forecast Growth

Several research analysts have recently issued reports on the company. Evercore set a $528.00 price objective on Microsoft in a research note on Thursday, July 30th. TD Cowen restated a “buy” rating and issued a $540.00 price objective on shares of Microsoft in a research report on Thursday, July 30th. Wedbush reiterated an “outperform” rating and issued a $575.00 price objective on shares of Microsoft in a report on Wednesday, May 13th. Cantor Fitzgerald boosted their target price on Microsoft from $502.00 to $522.00 and gave the stock an “overweight” rating in a report on Monday, July 27th. Finally, The Goldman Sachs Group reaffirmed a “buy” rating and issued a $640.00 price target on shares of Microsoft in a research note on Thursday, July 30th. Forty-two analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus target price of $564.27.

Microsoft Price Performance

The company’s 50-day simple moving average is $441.99 and its 200-day simple moving average is $415.21. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.22 and a current ratio of 1.23. The company has a market capitalization of $3.71 trillion, a PE ratio of 27.82, a P/E/G ratio of 1.60 and a beta of 1.11.

Microsoft (NASDAQ:MSFT) last posted its quarterly earnings results on Wednesday, July 29th. The software giant reported $4.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $4.24 by $0.50. The firm had revenue of $90.01 billion during the quarter, compared to analysts’ expectations of $87.62 billion. Microsoft had a net margin of 40.31% and a return on equity of 31.98%. The firm’s revenue for the quarter was up 17.7% on a year-over-year basis. During the same period in the prior year, the company posted $3.65 earnings per share. As a group, sell-side analysts anticipate that Microsoft Corporation will post 19.59 earnings per share for the current year.

Microsoft Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given 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 dividend yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is presently 20.27%.

Insider Activity at Microsoft

In related news, CEO Judson Althoff sold 10,000 shares of the company’s stock in a transaction 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 completion of the transaction, the chief executive officer directly owned 100,447 shares in the company, valued at $49,007,086.83. This represents a 9.05% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Satya Nadella sold 86,525 shares of the stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total value of $43,388,826.50. Following the completion of the transaction, the chief executive officer directly owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. The trade was a 15.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 108,335 shares of company stock valued at $53,499,700 in the last quarter. Insiders own 0.03% of the company’s stock.

Institutional Investors Weigh In On Microsoft

Large investors have recently bought and sold shares of the business. Montgomery Financial Services LLC acquired a new position in Microsoft during the 2nd quarter worth $26,000. Longfellow Investment Management Co. LLC grew its stake in 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 during the period. Bernzott Capital Advisors acquired a new stake in Microsoft during the 4th quarter worth approximately $34,000. Frankly Finances LLC bought a new position in Microsoft during the 2nd quarter worth about $35,000. Finally, Timmons Wealth Management LLC acquired a new position in Microsoft during the 4th quarter worth approximately $36,000. 71.13% of the stock is currently owned by 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).