If You Invested $1000 in Microsoft a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
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
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Microsoft, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in November 2013 would be worth $9,741.59, or a gain of 874.16%, as of November 2, 2023, and this return excludes dividends but includes price increases.
The S&P 500 rose 140.56% and the price of gold increased 44.55% over the same time frame in comparison.
Analysts are forecasting more upside for MSFT too.
Microsoft’s fiscal 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 momentum in the small and medium businesses, frontline worker offerings and a gain in revenue per user drove the top line. Steady growth in Dynamics products and cloud services aided LinkedIn revenues. Shares have outperformed the industry year to date. However, continued customer shift to cloud offerings is hurting growth in Office's commercial licensing revenues. Higher operating expenses driven by marketing, LinkedIn and cloud engineering amid intense competition in the cloud space remain a concern.
The stock has jumped 8.50% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 16 higher, for fiscal 2023; the consensus estimate has moved up as well.
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