History, advantages and disadvantages • Benzinga


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Microsoft is a tech giant with a history of innovation spanning over 40 years. Chances are, you’ve used a Microsoft product at some point in the past year and maybe even reading this product article now.

Born in a Washington garage, the company was formed by college-aged programmers Bill Gates and Paul Allen and now offers several successful products for use in dozens of tech niches. The garage-born company recently surpassed $ 800 million in market cap and new CEO Satya Nadella looks like a great leader. Can something derail this stock?

What is Microsoft?

In 1975, Bill Gates had an idea. His childhood friend Paul Allen had just shown him an issue of Popular Mechanics with an article on one of the first personal computers. The two had discussed on several occasions how the future would view computers in homes and businesses across the country and this article presented a unique opportunity.

Gates and Allen then developed a BASIC interpretation program for the machine mentioned in the magazine. The interpreter was well received and the couple obtained permission to distribute.

Allen suggested that they name their new company “Micro-Soft” and Gates became the first CEO on April 4. Microsoft branched out to design the MS-DOS operating system in 1980, which became the company’s first major success following a deal with IBM. MS-DOS was the dominant operating system on most personal computers throughout the 1980s. From MS-DOS came Microsoft Windows in 1985, an operating system still used by millions of people today ( although much more advanced versions).

Microsoft Office followed in 1990, a productivity suite with useful work programs like Word, Excel, and Powerpoint. In 2001, the company had products in the computer hardware and software lines and decided to enter new territory: console video games. Microsoft’s new Xbox was in direct competition with video game giants Sony and Nintendo, ultimately taking significant market share from both. Today, Microsoft has its hand in many products in the technology sector. They still make and sell Office and Windows, but now the company also distributes:

  • Smartphones and tablets
  • Data security
  • Internet search and browsing
  • AI
  • cloud computing
  • Social networking

History of Microsoft Stock

Microsoft went public on March 13, 1986 after a decade of successful businesses in the booming computer industry. The price was $ 21 per share and the company raised $ 61 million through the initial offering.

Investors were eager to get their hands on such a popular name, and the stock price steadily climbed through the 1990s and early 2000s. During that 10-year period, the company’s shares split eight times, including a 2-to-1 split in 1999 just before the dot-com bubble burst. Here’s a chart showing the history of Microsoft stock splits: Like most tech companies, the dot-com bubble hit Microsoft hard, and the stock price hasn’t hit new highs for over fifteen years. There was a final stock split in 2003, but the company traded in a flat range for a long time.

The Great Recession sent Microsoft stocks down to levels not seen since 1997, and the rebound many stocks had in 2009 did not materialize for them. However, the rebound was not absent, only delayed. Microsoft stock caught fire in 2014 and the company pushed higher, eventually breaking its all-time division adjusted high at the end of 2016.

Microsoft’s latest record of $ 280.90 was recently hit in July 2021. Shares of the tech giant fell to $ 133 when the coronavirus pandemic began in March 2020.

Benefits of owning Microsoft stocks

Supporters of Microsoft stock believe the company still has room to climb for the following reasons.

Several sources of income

Microsoft is involved in more than PCs now. The Azure cloud computing system is a big seller, and the company recently acquired the programmer networking site GitHub. And don’t forget that they still sell Windows, Office, and Xbox.

Strong leadership

Satya Nadella took over from Steve Ballmer as CEO in 2014 and immediately began reshaping the business for the modern age. Nadella has extended the company’s reach to cloud computing and AI while working to form a responsible corporate culture. He has a different vision than Bill Gates and is ready to cooperate with his competitors to achieve his goals for the company.

No sign of slowing down

Microsoft celebrated its 43rd birthday in April, but the company doesn’t seem to belong to it. They jumped straight into the AI ​​race and built a tremendous offering in the cloud computing space. Microsoft has a history of adaptation and should never be left out, especially with a new forward-thinking CEO.

Disadvantages of owning Microsoft stocks

Thinking of adding Microsoft stocks to your portfolio? Make sure you consider these potential drawbacks before you buy.

Too much dependent on PCs

Microsoft may have a diverse product catalog, but Windows is one of their big sellers, and the future of the PC market is cloudy at best. Windows needs to be revamped for the mobile age to continue to be successful.

Smart competitors

Microsoft is no longer content to compete with Apple. Companies like Google, Amazon, Oracle, Salesforce, and Sony all thrive in the spaces Microsoft is entering and there will be constant pressure to innovate.

Overbought potential of the share

The stock has a P / E ratio above 36. Could a slowdown occur? How much bigger can a $ 1.8 trillion business become?

How to buy Microsoft stocks

  1. Determine how much you want to invest

    Microsoft is a technological value, an industry known for its volatility. If you want to add Microsoft stocks to your portfolio, make sure you set an amount to invest and don’t stray from it.

  2. Find stocks with your brokerage account or buy directly from Microsoft

    For most investors, the easiest way to buy Microsoft stocks is through a brokerage account. If you don’t have one, check out Benzinga’s ranking of the best online stock brokers. You can also buy stocks directly through Microsoft’s Direct Stock Purchase and Dividend Reinvestment Program. Visit Microsoft investor relations page for more information on direct stock purchases.

  3. Complete your purchase

    Once you have opened a brokerage account, it is time to buy the stocks. Microsoft trades under the symbol MSFT, so locate these stocks and place a buy order. Use a market order to buy the stock immediately or a limit order to buy the stock once it reaches (or drops to) a certain price.

Best online brokers

Final thoughts

Microsoft might not be seen as a cutting edge tech company like Google or Apple, but they’ve produced some awesome new projects just as quickly. Advances in AI and cloud computing already seem to be paying off. New CEO Satya Nadella has the company on the right track, but the decline of PCs could start to squeeze revenues. It will be up to Microsoft to innovate once again.

Related Content: How to Buy Foxconn Stock in the US

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