Microsoft attracts investors as an international company with opportunities for growth and development. Find out more about Microsoft stock performance.
With a large amount of capital that has yet to be fully leveraged, Microsoft is a leader of the technology and IT products and services market.
The company went public for the first time in 1986. When it made its market entry, its stock was worth $25.50 and has been rising ever since. Microsoft went through rough patches in 2006 ($21.92) and in 2008 ($15.28), but the tech giant and its stock price rebounded in March 2009. Today, the firm is listed on the stock market and continues to attract investors.
Several factors impact Microsoft stock prices. In this article, you’ll find useful information about the company, its activities, changes in its share prices and its stock market performance.
Bill Gates and Paul Allen founded Microsoft in the United States in 1975. Based in Washington State, the company is known for developing and marketing operating systems for computers and software for PCs and servers.
The company offers several products, such as the Windows operating system, the Office suite (which includes Word, Excel, PowerPoint, Outlook, Access, Exchange and Onedrive), game consoles such as the well-known Xbox, the search engine Bing, the web browser Explorer, the cloud service One, the developer tools Visual Studio, the professional social network Linkedin, the game Minecraft, the instant messaging and VOIP software Skype and the Microsoft Surface computer and tablet. According to NetMarketShare.com, Microsoft has an 87% share of the global operating system market. Windows remains the most widely used operating system for both business and home users.
Satya Nadella became CEO of Microsoft in 2014, following in the footsteps of Bill Gates (1975-1999) and Steve Ballmer (2000-2013). The arrival of a new CEO brought about several changes at the Redmond firm. Office has become a subscription service and is no longer referred to as "Office 365", but as "Microsoft 365". The Windows Phone system has been shelved and Microsoft products are now competing with Google and Apple.
The Vanguard Group holds 6.07% of the company's shares, while BlackRock holds 5.60%. The rest is made up of private and institutional shareholders.
In 2020, Microsoft's revenue amounted to $ 143.02 billion, an increase of 14% compared to the previous year ($ 125 billion in 2019) for a net profit of $ 44.28 billion (compared to $ 39 billion in 2019), a growth of 13%.
Revenue stems from the sale of products and services : 50% for operating systems, 31% for software, 14% for video games and 5% for Internet services.
The company was not affected by the economic fallout of the Covid-19 pandemic. On the contrary, the PC market has grown and many of its business lines, such as Xbox, Windows and Office products, have had a very positive year.
The Microsoft group is a partner of Schneider Electric, a European group specializing in the automation and digital transformation of energy management for residential housing, commercial buildings, infrastructure and industry. This partnership aims to deploy disruptive technologies to optimize operations and transform products and services through the Internet of Things.
Thales, a manufacturer and supplier of electronic equipment and systems for the aerospace, defense, security and transportation industries, is another Microsoft partner. The company has also partnered with Publicis, a major player in the French communications industry.
The group's main competitors in the market include Apple for operating systems, IBM for computer systems, Google for the Internet, Nintendo for consoles and video games, Sony Corporation for mobile devices, Intel Corporation for microprocessors and processors, Oracle Corporation for software and Hewlett-Packard for computer terminals.
On the night of its IPO, March 13, 1986, Microsoft's stock was $25.50 and the company was worth $770 million. The stock price lost its stability in the 2000s. It was at $21.92 in 2006, followed by a historical low of $15.28 in 2008. Stock prices began to rise again in March 2009 and the firm's shares began to recover, reaching $28.58 in 2010.
Since 2014, Microsift stock has risen by more than 260%. At the beginning of 2017, its overall market cap was 505,998.65 million USD. In 2019, it reached the $1 trillion mark, with a stock price above $130. Its share value has increased 12-fold in eleven years since 2009.
With a $1,536 billion market cap, it is the third largest company in the world as of July 2020. Microsoft's share price is $202.54. On the stock markets, its shares are, on average, traded over 35 million times.
In January 2021, Microsoft was ranked second in the Nasdaq Global Select Market of the Nasdaq All Markets in the United States, with a total market cap of $1,647,432 million.
Microsoft's positioning in the global market remains its major asset. For the past 40 years, the group has been a leader in technology products and services, with opportunities for growth and development. Moreover, in recent years, the group has expanded its business in services such as Cloud computing. Cloud, big data and Artificial Intelligence market shares are growing strongly, which can strengthen its business model and reassure and attract investors.
However, Microsoft's dividend yield ratio is relatively low. During 2020, $2.04 per share was paid to shareholders in 4 quarterly installments, or 1% yield if the stock price was $202.54.
The company's weak points lie in its policy of higher product prices compared to competitors, a higher P/E of 34.8 and its current marketing strategy, which does not push customers to spend more in order to boost its growth.
Investing in Microsoft can have both advantages and disadvantages. Seek professional advice before buying shares.