Here's How Much a $1000 Investment in Microsoft Made 10 Years Ago Would Be Worth Today
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Microsoft (MSFT) ten years ago? It may not have been easy to hold on to MSFT for all that time, but if you did, how much would your investment be worth today?
Microsoft's Business In-Depth
With that in mind, let's take a look at Microsoft's main business drivers.
Microsoft Corporation is one of the largest broad-based technology providers in the world. The company dominates the PC software market with more than 73% of the market share for desktop operating systems.
The company’s Microsoft 365 application suite is one of the most popular productivity software globally. It is also one of the prominent public cloud providers that can deliver a wide variety of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions at scale.
Redmond, WA-based Microsoft’s products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools and video games. Its software solutions and hardware devices are playing an important role in developing the metaverse.
The company designs and sells PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. Through Azure, it offers cloud-based solutions that provide customers with software, services, platforms and content.
Microsoft reported revenues of $211.9 billion in fiscal 2023. The company reports operations under three segments: Productivity & Business Processes, Intelligent Cloud and More Personal Computing.
Productivity & Business Processes accounted for 32.6% of fiscal 2023 revenues. The segment offers productivity and collaboration tools and services including Office 365, Dynamics business solutions, Teams, Relationship Sales solution, Power Platform and LinkedIn.
Intelligent Cloud, which include Azure cloud services, contributed to 41.4% of fiscal 2023 revenues.
In Jan, 2022, the company entered into a definitive agreement to acquire Activision Blizzard. The acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console, and cloud gaming. Microsoft and Activision Blizzard have jointly agreed to extend the merger agreement through Oct 18, 2023 to allow for additional time to resolve remaining regulatory concerns.
More Personal Computing represented 25.8% of fiscal 2023 revenues. The segment comprises mainly the Windows, Gaming (Xbox hardware and Xbox software and services), Devices (Surface, PC accessories, and other intelligent devices) and Search (Bing and Microsoft Advertising) businesses.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Microsoft ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2013 would be worth $10,179.07, or a 917.91% gain, as of November 21, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 155.27% and the price of gold went up 49.14% over the same time frame.
Analysts are anticipating more upside for MSFT.
Microsoft’s first-quarter results gained from strong Intelligent Cloud and Productivity and Business Processes revenues. Intelligent Cloud revenues were driven by growth in Azure and other cloud services. Productivity and Business Processes revenues rose due to a strong adoption of Office 365 Commercial solutions. Continued strength in the small and medium businesses, frontline worker offerings and a gain in revenue per user were key growth drivers. We expect fiscal 2024 net sales to grow 12.7% from fiscal 2023. However, Office's declining commercial licensing has been a headwind as customers shift to cloud offerings. Steady growth in Dynamics products and cloud services aided LinkedIn revenues. Higher operating expenses driven by marketing, LinkedIn and cloud engineering amid intense competition in the cloud space remain a concern.
Shares have gained 14.61% over the past four weeks and there have been 17 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
