Goldman Sachs Downgrades Microsoft Shares

Microsoft Corp. experienced its biggest decline in the last 5 months as Goldman Sachs Group stated that the software maker is finding it hard to improve PC sales. Goldman Sachs also commented that Microsoft’s push into the consumer devices has failed to gain any sort of traction.

In a note released for the investors on today, the Analyst of Goldman Sachs, Heather Bellini, advised them to sell stocks of Microsoft. Apart from that, the shares were downgraded from its earlier neutral rating as well. Not only Heather Bellini, but two other analysts have reduced their ratings on shares of Microsoft, the biggest software company in the world, as well.

Incidentally, the newly launched operating system of Microsoft, Windows 8 experienced a lackluster corporate demand. The PC shipments tumbled by 14% across the world in the first quarter of 2013. Thereby, the last quarter was the worst quarter for the software company since IDC, a researcher which track sales, started its operations. Not only that, but, even regular consumers are finding it easier to deal with tablets and smartphones, forgoing PCs. Incidentally, when it comes to Microsoft’s own offering in smartphones or tablets sector, nothing notable has happened.

In the note, Bellini added that Microsoft is facing critical secular challenges as the PC demand is deteriorating with every passing day. Bellini added that the financial results will decline further as well, unless the company is able to reposition itself successfully, as a meaningful participant of the consumer compute’s new era.

Microsoft experienced a tumble of 5.1% on today and each share is currently priced at $28.57. This marks the biggest intraday decline of Microsoft shares since 13th November, 2012. The stock has gained by 13% in 2013 till yesterday. The increase for the benchmark gauge Standard & Poor’s 500 Index has been of 11%.

Stephen Turner, who is an analyst for Hilliard Lyons and analyst of Nomura Holdings, Rick Sherlund, both downgraded Microsoft shares to neutral as well, from its previous rating of buy. Sherlund believes that PCs are part of a mature market now and hence, the demand is expected to decline gradually. Half of the market doesn’t want Office now, so, they don’t use Windows or Microsoft either.

Microsoft launched a tablet computer named as Surface, but it kind of fell short of the projections since becoming available for sale on 26th October.