microsoftlogoTwo influential analysts downgraded Microsoft’s shares this morning, another blow to the Redmond company as it struggles to gain traction in smartphones and tablets, and feels the impact of slumping computer shipments.

Goldman Sachs analyst Heather Bellini downgraded Microsoft to “sell” from her previous rating of “neutral.” Nomura analyst Rick Sherlund, meanwhile, downgraded the shares to “neutral” from his previous rating of “buy.”

The reports follow word from IDC that shipments of traditional computers fell nearly 14 percent in the first quarter, the steepest decline in the nearly two decades that the research firm has been tracking shipments on a quarterly basis. IDC said in its report that Windows 8 was depressing the market, with consumers and businesses reluctant to upgrade to the radical new interface.

“The combination of Windows 8’s sluggish adoption and the absence of compelling new hardware have been disappointing, with no relief likely until later this year when Intel’s Haswell new notebook processor extends Ultrabook battery life to 10 hours and prices fall to an expected $600 level,” writes Nomura’s Sherlund, who originally made his mark as the longtime Goldman analyst on Microsoft.

“The company faces critical secular challenges given the deteriorating PC demand backdrop,” Bellini said in a note to clients, according to Bloomberg News. Microsoft’s market share will “gradually deteriorate unless Microsoft successfully repositions itself as a more meaningful participant in the new era of consumer compute.”

Bloomberg notes that Bellini is now the only major analyst covering Microsoft with a “sell” rating on the stock.

PreviouslyMicrosoft’s hits and misses: Insights from a prolific maker of Windows 8 apps

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  • Guest

    I Love our strategy. The board loves our strategy.
    – Steve Ballmer

    • guest

      Hey dude, get your own lines instead of copying and pasting mine.

  • guest

    Bellini is right. And wow, down nearly 5% so far.

  • Mark

    Can’t wait to see how Frank Shaw attempts to spin this. Oh right, it’s really bad news so he’ll just ignore it.

  • Paul

    Fire Ballmer. Fire the Board. The reversal of competitive position and associated loss of valuation that has occurred on their watch is inexcusable.

  • HereCometheKnives

    This is the last quarter results before the roll over of the FY.

    Get ready for serious layoffs in June/July. The only way to make the stock attractive now is cost cutting.

    • Whatsmystupidnametoday

      Ballmer doesn’t care about the stock. A disgruntled ex-employee like you should know that.

  • Christopher Budd

    Serious question: is this the first “sell” rating for Microsoft?

    • guest

      Serious question: what difference does it make? A rating is time-specific and more importantly based on a current and specific analysis, only some of which is included in this article.

  • Mike_Acker

    is it the PC market that is slumping, — or the Windows market?

    a PC is the best tool for many types of work and that stuff isn’t going away. Casual users have expanded the market by moving into mobil devices, that is true. and likely most folks who need a “PC” or desktop workstation already have one. the Win8 mess is probably just backing up the replacement business for desktops

    of which there’s a lot — what — 39% of computers are still using XP ? most of those are probably office workstations which are hard to update because of the specialized apps they may be using

    demand will back up and then what ?


    I would not bet against it. I’ve been on Linux(Ubuntu) for 6 months now. LibreOffice v.4 is now better at compatibility with msft office and that is huge . and you have to look at the security issue too, Linux being regarded as significantly better in that regard as well

    • guest

      Keep shilling Mike.

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