Microsoft (NASDAQ:MSFT) Shares Down 3.6% – Time to Sell?

Microsoft Corporation (NASDAQ:MSFT)’s stock price dropped 3.6% during trading on Thursday. The stock traded as low as $532.68 and last traded at $535.93. 41,511,821 shares were traded during trading, an increase of 24% from the average daily volume of 33,513,797 shares. The stock had previously closed at $555.80.

Trending Headlines about Microsoft

Here are the key news stories impacting Microsoft this week:

• Positive Sentiment: Demand for Microsoft’s lucrative cloud and AI capacity continues to exceed supply, supporting the longer-term growth outlook while Azure capacity catches up. Why Is Everyone Talking About Microsoft Stock?
• Negative Sentiment: Microsoft reportedly declined a multibillion-dollar option to expand its Texas data-center lease with Nscale. The decision, amid construction delays and a reported AI-spending shortfall, has prompted concern that Microsoft may be scaling back or tightening control over infrastructure commitments. Microsoft rejects multibillion-dollar AI deal with UK’s Nscale, FT reports
• Negative Sentiment: Microsoft is reportedly increasing oversight of “neocloud” data-center projects after delays disrupted expansion plans. A slower buildout could postpone the capacity needed to convert strong AI demand into cloud revenue, while raising execution risks for its infrastructure strategy. Microsoft tightens oversight of neocloud data center projects, Bloomberg News reports

Analysts Set New Price Targets

A number of brokerages have recently issued reports on MSFT. UBS Group set a $700.00 price target on Microsoft in a research note on Thursday, October 29th. Deutsche Bank Aktiengesellschaft reiterated a “buy” rating and issued a $600.00 target price on shares of Microsoft in a research report on Monday, October 12th. Guggenheim raised their price target on shares of Microsoft from $586.00 to $595.00 and gave the stock a “buy” rating in a research note on Thursday, October 29th. Phillip Securities cut shares of Microsoft from a “moderate buy” rating to a “hold” rating in a research note on Monday, October 12th. Finally, Morgan Stanley reiterated an “overweight” rating on shares of Microsoft in a report on Thursday, October 29th. One analyst has rated the stock with a Strong Buy rating, forty-five have given a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $609.54.

Microsoft Stock Performance

The firm has a 50-day moving average price of $515.34 and a 200 day moving average price of $439.42. The firm has a market capitalization of $3.98 trillion, a PE ratio of 27.96, a price-to-earnings-growth ratio of 1.54 and a beta of 1.05. The company has a quick ratio of 1.21, a current ratio of 1.22 and a debt-to-equity ratio of 0.07.

Microsoft (NASDAQ:MSFT) last issued its quarterly earnings results on Wednesday, October 28th. The software giant reported $4.89 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $4.72 by $0.17. Microsoft had a net margin of 41.17% and a return on equity of 31.28%. The company had revenue of $92.28 billion for the quarter, compared to analyst estimates of $90.62 billion. During the same period in the prior year, the firm earned $4.13 earnings per share. The business’s revenue for the quarter was up 18.8% compared to the same quarter last year. Research analysts expect that Microsoft Corporation will post 19.86 earnings per share for the current year.

Microsoft Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Shareholders of record on Thursday, November 19th will be issued a dividend of $0.98 per share. This is a positive change from Microsoft’s previous quarterly dividend of $0.91. The ex-dividend date is Thursday, November 19th. This represents a $3.92 annualized dividend and a yield of 0.7%. Microsoft’s dividend payout ratio (DPR) is currently 19.00%.

Insider Activity at Microsoft

In related news, EVP Amy Hood sold 7,305 shares of Microsoft stock in a transaction that occurred on Tuesday, October 13th. The shares were sold at an average price of $545.42, for a total value of $3,984,293.10. Following the completion of the transaction, the executive vice president owned 555,396 shares in the company, valued at $302,924,086.32. The trade was a 1.30% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Satya Nadella sold 86,525 shares of Microsoft stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $501.46, for a total transaction of $43,388,826.50. Following the sale, the chief executive officer directly owned 486,763 shares of the company’s stock, valued at approximately $244,092,173.98. This trade represents a 15.09% decrease in their ownership of the stock. 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. In the last ninety days, insiders sold 135,504 shares of company stock worth $68,138,024. 0.03% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in MSFT. Montgomery Financial Services LLC purchased a new position in Microsoft during the 2nd quarter worth $26,000. Frankly Finances LLC purchased a new stake in shares of Microsoft during the 2nd quarter worth approximately $35,000. Bard Associates Inc. acquired a new stake in Microsoft in the second quarter valued at $37,000. PMV Capital Advisers LLC purchased a new position in Microsoft during the 2nd quarter valued at about $38,000. Finally, Fiduciary Advisors Inc. raised its position in shares of Microsoft by 37.4% during the 2nd quarter. Fiduciary Advisors Inc. now owns 125 shares of the software giant’s stock worth $47,000 after purchasing an additional 34 shares during the last quarter. Hedge funds and other institutional investors own 71.13% of the company’s stock.

About Microsoft

Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices and digital platforms. Its products and services are used by consumers, businesses, governments and educational institutions worldwide.

The company’s principal offerings include the Windows operating system; Microsoft 365 productivity applications such as Word, Excel, Teams and Outlook; Azure cloud computing and infrastructure services; Dynamics business applications; and enterprise security solutions.