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 factor that can influence investors is FOMO, or the fear of missing out, especially with 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.
Redmond, WA-based Microsoft Corporation is one of the largest broad-based technology providers in the world. The company dominates the PC software market with more than 80% of the market share for operating systems.
The company’s Microsoft 365 application suite is one of the most popular productivity software globally. It is also now one of the two public cloud providers that can deliver a wide variety of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions at scale.
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.
The company designs and sells PCs, tablets, gaming and entertainment consoles, phones, 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 $168.1 billion in fiscal 2021. The company reports operations under three segments: Productivity & Business Processes, Intelligent Cloud and More Personal Computing.
Productivity & Business Processes accounted for 32.1% of fiscal 2021 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 35.7% of fiscal 2021 revenues.
On October 25, 2018, the company completed the acquisition of GitHub, which provides a collaboration platform and code hosting service for developers, for $7.5 billion.
More Personal Computing represented 32.2% of fiscal 2021 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.
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 August 2011 would be worth $12,153.41, or a 1,115.34% gain, as of August 25, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 280.96% and the price of gold increased -2.15% over the same time frame in comparison.
Analysts are forecasting more upside for MSFT too.
Microsoft’s performance is driven by strength in its Azure cloud platform amid accelerated global digital transformation. Teams’ user growth is gaining from continuation of remote work as well as adoption of hybrid work model. Recovery in ad and job market boosted LinkedIn and Search revenues. Solid uptake of new Xbox consoles is aiding the gaming segment performance. The company is also witnessing growth in user base of its different applications including Microsoft 365 suite and Dynamics. Shares of the company have outperformed the industry in the year-to-date period. Microsoft expects Surface revenues to decline in the fiscal first quarter owing to tough year over year comparison and supply chain disruptions. Increasing spend on Azure enhancements amid intensifying competition in the cloud space from Amazon is likely to dent margins.The stock has jumped 5.61% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 14 higher, for fiscal 2021; the consensus estimate has moved up as well.
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Microsoft Corporation (MSFT): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.