What if you invested $1,000 in Microsoft in 1986?
In dollar terms, that $1,000 investment in 1986 would be worth a whopping $3.23 million today. But it gets better, because Microsoft has paid a dividend since 2003 -- and assuming you never sold a single share along the way, you'd have also received $341,513 in dividends.
How much an investment in Microsoft is worth. Microsoft stock first went public on March 13, 1986 at $21 per share. By the end of the trading day, the price had risen to $28 per share. Now, the price is nearly 13 times higher, closing at $360.69 on Nov.
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.
A $10,000 Investment in Microsoft in 1986 is Worth $39 Million Today!
Currently, Microsoft has a market capitalization of $2.94 trillion. Buying $1000 In MSFT: If an investor had bought $1000 of MSFT stock 20 years ago, it would be worth $14,170.19 today based on a price of $395.69 for MSFT at the time of writing.
This is the ninth time the company has split the stock since Microsoft went public back in March 1986. One original share will equal 288 shares after this split is effective.
Achieving this milestone isn't a walk in the park by any means, but it can be more accomplishable than many realize, thanks to the power of investing and compound interest. A $10,000 investment in Microsoft 30 years ago, at the start of January 1994, would be worth nearly $2.4 million today with dividends reinvested.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
The Rule of 72 is focused on compounding interest that compounds annually. For simple interest, you'd simply divide 1 by the interest rate expressed as a decimal. If you had $100 with a 10 percent simple interest rate with no compounding, you'd divide 1 by 0.1, yielding a doubling rate of 10 years.
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 $530,000. The same $1,000 invested in the S&P 500 would have theoretically turned into $6,186 over the same period.
Is it a good time to buy Microsoft stock?
MSFT Stock Forecast FAQ
Microsoft has 15.28% upside potential, based on the analysts' average price target. Is MSFT a Buy, Sell or Hold? Microsoft has a conensus rating of Strong Buy which is based on 32 buy ratings, 1 hold ratings and 1 sell ratings. The average price target for Microsoft is $470.02.
The all-time high Microsoft stock closing price was 419.78 on February 09, 2024. The Microsoft 52-week high stock price is 420.82, which is 1.3% above the current share price. The Microsoft 52-week low stock price is 245.73, which is 40.9% below the current share price.
Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), Alibaba Group Holding Limited (NYSE:BABA) is among the best forever stocks to buy now.
Unlike the higher-the-better Composite Rating, lower numbers represent more stable company earnings history. Microsoft currently earns a strong 6 rating. Nine other companies join Microsoft on the IBD Long-Term Leaders list, including Cadence Design Systems (CDNS), KLAC (KLAC) and Synopsys (SNPS).
Microsoft hasn't indicated any plans for a stock split, but given its robust growth, this may be the year it joins its tech peers in splitting its high-priced shares.
MSFT has paid dividends since 2003, beginning with payouts of $0.08 per share and increasing it through the years to a current payout of $0.68 per share each quarter.
Patience and the right stock can lead to incredible results
Microsoft had its IPO on Mar. 13, 1986. The original trading price was $21. The stock split nine times over the years, with two of those being 3-for-2 splits.
Now, let's consider how our calculations change if the time horizon is 10 years. If you are starting from scratch, you will need to invest about $4,757 at the end of every month for 10 years. Suppose you already have $100,000. Then you will only need $3,390 at the end of every month to become a millionaire in 10 years.
To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.
If you invest $10,000 and make an 8% annual return, you'll have $100,627 after 30 years. By also investing $500 per month over that timeframe, your ending balance would be $780,326. Exchange-traded funds (ETFs) and mutual funds are both excellent investment options.
Does Microsoft still own Apple stock?
Does Bill Gates own Apple stock? Within Jobs' first year back as CEO, he entered into a partnership with Bill Gates' Microsoft, which made a $150 million investment in Apple and committed to developing software for macOS. In 2003, Microsoft opted to sell all of its Apple stock for $550 million.
As of December 2023, Jeff Bezos owned approximately 9.56% of Amazon, as reported by Nasdaq. This is roughly a quarter of his ownership stake in 1998. In early 2024, Bezos remains the largest Amazon shareholder, despite holding less than 10% of the company.
We'll play it safe and assume you get an annual return of 8%. If you invest $1,000 per month, you'll have $1 million in 25.5 years. Data source: Author's calculations.
Rule of 69 is a general rule to estimate the time that is required to make the investment to be doubled, keeping the interest rate as a continuous compounding interest rate, i.e., the interest rate is compounding every moment.
To estimate the number of years it would take to double your money at a 7% annual rate of return, you can use the Rule of 72. Divide 72 by the annual rate of return: 72 ÷ 7 = 10.29. So, at a 7% return rate, it would take approximately 10.29 years to double your money.
