Not too long ago, Microsoft (MSFT) stock's glory days looked to be behind it as sales of desktop PCs slipped into a seemingly irreversible decline. Although the dot-com days of the 1990s minted many a "Microsoft millionaire," the aftermath of the tech bust led Microsoft stock to trade mostly sideways for more than a decade.
But the past 10 years have been nothing short of a renaissance for the tech giant. When CEO Satya Nadella ascended to the top job in 2014, he not only began instituting cultural changes, he transformed Microsoft's core strategy too. Cloud computing and subscription-based services were in; the days of selling software licenses via physical compact disks were passé.
That focus on enterprise customers and – most importantly – Microsoft's shift to selling cloud-based services such as Azure and Office 365 have been an astounding success. Today, Microsoft is a dominant player in cloud computing and a leader in generative artificial intelligence (AI) – and MSFT's returns prove it.
Indeed, Microsoft stock has been so remunerative since Nadella took over that long-term investors might not even notice that dud decade-plus following the tech bust.
Between January 1990 and December 2020, shares in Microsoft, which joined the Dow in 1999 at the height of the dot-com boom, generated a total return of 57,730%. The S&P 500's total return came to a mere 1,950% over the same span.
Along the way, Microsoft generated $1.91 trillion in wealth for shareholders, good for an annualized dollar-weighted return of 19.2%, according to Hendrik Bessembinder, professor of finance at the W.P. Carey School of Business at Arizona State University.
Only Apple (AAPL) generated more wealth for shareholders over those three decades, making Microsoft one of the best stocks of the past 30 years, per Bessembinder's findings, which account for cash flows in and out of the business and other adjustments.
The bottom line on Microsoft stock
(Image credit: YCharts)
With Microsoft trading near all-time highs (making it the world's second most valuable publicly traded company), it seemed like a good time to see what $1,000 invested in Microsoft 20 years ago would be worth today.
Have a look at the above chart and you see only market-matching returns until around 2015. Then MSFT takes off. Indeed, it took off so much that if you put a grand into Microsoft stock two decades ago, today it would be worth about $24,000. That's good for an annualized total return (price change plus dividends) of 17.2%, according to data from YCharts.
The same amount invested in the S&P 500 20 years ago would theoretically be worth about $7,400 today, or 10.5% annualized.
But wait, there's more.
Over its entire life as a publicly traded company, Microsoft has generated an annualized total return of 26%. The S&P 500's total return comes to 10.5% annualized over the same span.
Happily for Microsoft bulls, analysts very much expect shares to continue their market-smashing ways.
MSFT may refer to: Microsoft, NASDAQ stock symbol. Multi-stage fitness test, used to estimate maximum oxygen uptake. Tricolour Flame (Italian: Movimento Sociale Fiamma Tricolore or MS-FT), a neo-fascist Italian political party.
takes off. Indeed, it took off so much that if you put a grand into Microsoft stock two decades ago, today it would be worth about $24,000. That's good for an annualized total return (price change plus dividends) of 17.2%, according to data from YCharts.
The company's stock traded around $0.09 per share 20 years ago. If you had invested $1,000, you could have bought approximately 11,111 shares of NVIDIA stock. Currently, shares are trading at $123.43, which means your investment's value could have soared to $1,371,444 because of a significant stock price appreciation.
Here's how much you would have now if you invested in the S&P 500 20 years ago, based on varying starting amounts: $1,000 would grow to $2,533. $5,000 would grow to $12,665. $10,000 would grow to $25,331.
The stock's resilience is also attributed to its solid quarterly results and strategic investments in AI and cloud computing. By 2030, analysts predict the stock could reach between $850 and $1,000, making it a promising investment opportunity for long-term investors.
Then MSFT takes off. Indeed, it took off so much that if you put a grand into Microsoft stock two decades ago, today it would be worth about $24,000. That's good for an annualized total return (price change plus dividends) of 17.2%, according to data from YCharts.
The table below shows the present value (PV) of $1,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
This means that your $1,000 10 years ago — technically, $1,002 — would have bought 60 shares of Tesla. As of Mar. 3, 2024, those 60 shares of Tesla would be worth $12,158.40. That marks a 28.342% annual rate of return.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $448,000. The same $1,000 invested in the S&P 500 would theoretically have turned into about $7,300 over the same period.
Highlights and Key Points: Microsoft Share Price Forecast 2024–2030. As of 08.09. 2024, Microsoft (MSFT) stocks are trading at $401.60. A lot of analysts anticipate that Microsoft's shares will decline and reach $420 - $434 range by the end of 2024.
The latest closing stock price for Microsoft as of September 06, 2024 is 401.70. The all-time high Microsoft stock closing price was 466.73 on July 05, 2024.
However, stellar gains over the years, a potent position in technology, and vast financial resources indicate that Microsoft's stock is worth its premium price tag. The company's share price will likely continue trending up over the long term, making it an excellent option for patient investors.
Of the 47 analysts who recommended Amazon in June, 44 rated it a buy or a strong buy. Forecasters predict that Amazon will reach $200 per share a year from now and will continue to rise to $250 per share at the end of 2026. In 2027, the prediction is for a price of $300, and $250 by the end of 2028.
A $10,000 investment made a decade ago would be worth over $2.6 million today. While rare, Nvidia's success shows that life-changing returns can come relatively quickly. The million-dollar question is whether investors can still get the same type of returns from Nvidia in the future.
Ten Year Stock Price Total Return for NVIDIA is calculated as follows: Last Close Price [ 108.10 ] / Adj Prior Close Price [ 0.46 ] (-) 1 (=) Total Return [ 23,197.8% ] Prior price dividend adjustment factor is 0.96.
A $20,000 investment made in the semiconductor giant 10 years ago would be worth more than $3.4 million today -- up by around 170 times in value. It is also worth noting that the company has taken less than a decade to turn a $20,000 investment into precisely a $1 million.
Nvidia is a leader in the AI chip market and it can still be a good investment to hang on to for the long term. In a recession, however, investors should brace for the reality that it could perform much worse than the market.
Introduction: My name is Eusebia Nader, I am a encouraging, brainy, lively, nice, famous, healthy, clever person who loves writing and wants to share my knowledge and understanding with you.
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