Oct. 1 (Bloomberg) -- Microsoft Corp. shares slid the most in two months after being removed from the “conviction buy” list at Goldman Sachs Group Inc., which said the world’s largest software company faces risks to fiscal first-quarter earnings.

Microsoft, which still has a “buy” rating and $30 share- price forecast at Goldman Sachs, slipped 3.3 percent to $24.88. Before today the shares had climbed 32 percent this year, almost double the 17 percent gain for the Standard & Poor’s 500 Index.

“Microsoft might face one final soft quarter before re- entering the healthy product cycle with the Windows 7 launch,” analyst Sarah Friar wrote, citing “slower than expected” server software sales and its sale of the Razorfish Internet advertising agency, which Publicis Groupe SA bought in August for $530 million.

Microsoft is scheduled to introduce Windows 7, the latest version of its PC operating system, on Oct. 22 and report first- quarter results the next day.

The San Francisco-based analyst cut her 2010 profit forecast by 3 cents to $1.72 a share. Analysts estimate $1.69 a share, the average of 27 forecasts in a Bloomberg survey.

To contact the reporters on this story: Roger Neill at rneill3@bloomberg.net; Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: October 1, 2009 16:53 EDT