Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return in the past five years is 120%. But there is no question some big-name stocks performed better than others along the way.
Since 2016, Microsoft has continued its pivot from a business model driven by components such as PCs and servers to one centered on its Azure cloud services. In addition to Microsoft’s cloud business, major sales drivers include Microsoft Office 360, its LinkedIn professional social network (acquired in 2016) and its Xbox video game console.
Microsoft was one of the hardest-hit stocks of the dot-com bubble back in 2000, and it took the company 17 years to get back to its peak dot-com bubble market cap of around $600 billion.
At the beginning of 2016, Microsoft shares were trading at around $54. The stock hit its low point of the past five years in late 2016, dipping down to $39.72 before the company’s cloud investment efforts really started to gain traction.
From that point, the stock steadily churned higher over the next several years, reaching $100 in mid-2018 and $150 for the first time by late 2019. Microsoft also hit a major milestone in 2019 by reaching a $1 trillion market cap.
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Microsoft In 2021, Beyond: Microsoft peaked at $190.70 in early 2020 prior to the COVID-19 pandemic sell-off, which pushed the stock back down to as low as $135 in March. Fortunately for Microsoft investors, Microsoft’s cloud services, Office 365 and Teams communication platforms were perfectly positioned to benefit from a work-from-home environment.
By early summer, Microsoft shares made new all-time highs, peaking at $242.64 in January 2021.
Microsoft investors that bought and held on through a volatile five-year period turned a significant profit. In fact, $1,000 worth of Microsoft stock bought in 2016 would be worth about $5,030 today, assuming reinvested dividends.
Looking ahead, analysts expect Microsoft to continue its push higher in the next 12 months. The average price target among the 31 analysts covering the stock is $275, suggesting 17% upside from current levels.
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