Microsoft (NASDAQ:MSFT) Shares Down 2.2% – What’s Next?

02 Jan 2026, 17:28 by Doug Wharley · The Cerbat Gem

Microsoft Corporation (NASDAQ:MSFT – Get Free Report)’s stock price dropped 2.2% during trading on Friday . The company traded as low as $470.16 and last traded at $472.94. Approximately 25,480,971 shares changed hands during trading, an increase of 22% from the average daily volume of 20,920,828 shares. The stock had previously closed at $483.62.

Microsoft News Roundup

Here are the key news stories impacting Microsoft this week:

Positive Sentiment: Wall Street remains broadly bullish on MSFT — analysts and outlets label Microsoft a top pick for 2026 and a “strong buy,” citing AI monetization and cloud durability as drivers of upside. Wall Street Says Microsoft Is a ‘Strong Buy.’ Let’s Look at Who Owns MSFT Stock?
Positive Sentiment: Some analysts publicly prefer Microsoft over Google in the AI race, arguing MSFT’s Azure and partnerships reduce downside risk versus peers — a positive signal for longer‑term market share and revenue capture. Why This Analyst Prefers Microsoft Over Google In The AI Race
Positive Sentiment: Debt and cash flow profile supports sustained AI investment — several writeups (including MarketBeat roundups) say MSFT’s balance sheet makes elevated CapEx manageable and that recent pullbacks are “buyable dips.” Beyond the Santa Claus Rally—5 Quality Stocks to Buy in 2026 (MSFT)
Neutral Sentiment: Analysis pieces (e.g., Seeking Alpha) argue raised CapEx for AI isn’t a major concern versus future ROI, positioning MSFT as still relatively cheap on an AI-adjusted basis — a mixed read that keeps volatility likely while fundamentals mature. Microsoft: AI Superpower Still Cheap – Raised Capex Not A Big Concern
Negative Sentiment: Near‑term selling pressure is coming from investors reassessing Microsoft’s AI edge versus Alphabet/Google — uncertainty over who will monetize AI faster is prompting profit‑taking and weighing on the stock. Microsoft (MSFT) Stock Moves Lower As Investors Assess Its AI Edge Against Google
Negative Sentiment: Broader market action is mixed — the Nasdaq was roughly flat while indexes rotated — and Microsoft’s size makes it a significant weight on the tech‑heavy index, magnifying any MSFT weakness for the session. How major US stock indexes fared Friday, 1/2/2026

Analyst Ratings Changes

Several brokerages recently issued reports on MSFT. Daiwa Capital Markets lowered their target price on Microsoft from $640.00 to $630.00 and set a “buy” rating for the company in a research report on Friday, November 7th. HSBC raised their price objective on Microsoft from $643.00 to $648.00 in a research report on Monday, October 27th. Citigroup upped their target price on Microsoft from $682.00 to $690.00 and gave the company a “buy” rating in a report on Thursday, October 30th. Wolfe Research decreased their target price on shares of Microsoft from $675.00 to $625.00 and set an “outperform” rating for the company in a research report on Monday, December 15th. Finally, Wells Fargo & Company boosted their price target on shares of Microsoft from $675.00 to $700.00 and gave the stock an “overweight” rating in a research report on Thursday, October 30th. Two investment analysts have rated the stock with a Strong Buy rating, thirty-seven have assigned a Buy rating and four have assigned a Hold rating to the stock. Based on data from MarketBeat.com, Microsoft currently has an average rating of “Moderate Buy” and a consensus target price of $631.03.

Check Out Our Latest Stock Report on MSFT

Microsoft Stock Down 2.2%

The stock has a market cap of $3.52 trillion, a price-to-earnings ratio of 33.64, a price-to-earnings-growth ratio of 1.81 and a beta of 1.07. The firm’s fifty day moving average price is $494.48 and its two-hundred day moving average price is $503.72. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.40 and a quick ratio of 1.39.

Microsoft (NASDAQ:MSFT – Get Free Report) last issued its earnings results on Wednesday, October 29th. The software giant reported $4.13 EPS for the quarter, beating analysts’ consensus estimates of $3.65 by $0.48. The business had revenue of $77.67 billion during the quarter, compared to analyst estimates of $75.49 billion. Microsoft had a return on equity of 32.45% and a net margin of 35.71%.The firm’s revenue was up 18.4% compared to the same quarter last year. During the same period in the previous year, the company posted $3.30 EPS. Sell-side analysts forecast that Microsoft Corporation will post 13.08 earnings per share for the current fiscal year.

Microsoft Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Thursday, March 12th. Investors of record on Thursday, February 19th will be given a $0.91 dividend. The ex-dividend date of this dividend is Thursday, February 19th. This represents a $3.64 annualized dividend and a yield of 0.8%. Microsoft’s dividend payout ratio (DPR) is presently 25.89%.

Insider Buying and Selling at Microsoft

In related news, EVP Takeshi Numoto sold 2,850 shares of the firm’s stock in a transaction dated 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 transaction, the executive vice president owned 55,782 shares of the company’s stock, valued at approximately $26,703,959.04. This trade represents a 4.86% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Bradford L. Smith sold 38,500 shares of Microsoft stock in a transaction dated Monday, November 3rd. The shares were sold at an average price of $518.64, for a total value of $19,967,640.00. Following the transaction, the insider owned 461,597 shares of the company’s stock, valued at $239,402,668.08. This trade represents a 7.70% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 54,100 shares of company stock valued at $27,598,872. Corporate insiders own 0.03% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the stock. Boltwood Capital Management grew its holdings in Microsoft by 0.9% during the fourth quarter. Boltwood Capital Management now owns 18,290 shares of the software giant’s stock worth $8,845,000 after buying an additional 157 shares in the last quarter. First Financial Bank Trust Division boosted its holdings in Microsoft by 0.6% during the 4th quarter. First Financial Bank Trust Division now owns 63,946 shares of the software giant’s stock worth $30,926,000 after acquiring an additional 370 shares during the last quarter. Insight Wealth Strategies LLC grew its stake in shares of Microsoft by 2.3% in the 4th quarter. Insight Wealth Strategies LLC now owns 16,139 shares of the software giant’s stock worth $7,805,000 after acquiring an additional 367 shares in the last quarter. Global Wealth Strategies & Associates raised its holdings in shares of Microsoft by 1.5% in the fourth quarter. Global Wealth Strategies & Associates now owns 3,256 shares of the software giant’s stock valued at $1,575,000 after purchasing an additional 49 shares during the last quarter. Finally, Mirova lifted its position in shares of Microsoft by 11.3% during the third quarter. Mirova now owns 87,188 shares of the software giant’s stock valued at $45,159,000 after purchasing an additional 8,858 shares in the last quarter. Hedge funds and other institutional investors own 71.13% of the company’s stock.

About Microsoft

(Get Free Report)

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).