How to Buy Microsoft Stock – Expensive But Worth It?
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Unless you have lived under a rock, you have heard of Microsoft and its founder, Bill Gates. The Windows operating system made personal computing easy and made Microsoft a household name. The company is also behind the gaming console Xbox, Skype, the search engine Bing, and other services.
Gates is one of the richest people in the world, and although he no longer runs Microsoft (just owns shares), many investors have followed him and his former company in an attempt to earn even a fraction of what he has earned.
As one of the top IT companies giving stiff competition to Apple and Google, Microsoft continues to break records yearly and has worked with the U.S. Army for augmented reality headsets.
As of May 2, 2024, the company traded hands at $395.12 per share. Want to get your hands on shares (or fractional shares if the price is too steep)? Let’s go through the process.
In this article
Step 1: Finding a broker that offers Microsoft Stock
Shares of publicly traded companies are available to anyone. You can purchase Microsoft shares in several ways, but one of the easiest and most convenient ways to do it is through an online brokerage account. Several online platforms offer the capability to purchase shares, but each has its own commissions, fees, and minimums. Consider all the options before making a decision. If you do not have adequate funds, you can buy fractional shares. Here are three online platforms that can help.
Related: Best Brokerages for Beginners
Stash
Stash makes investing easy and hassle-free for beginners. The app is suitable for those who do not have a lot of capital and are new to the stock market world. You can easily invest in thousands of stocks through the app, and the paid service is available for as low as $3 per month for a beginner account, with its premium account coming in at $9 per month.
You do not need to make any opening deposit, but making one is beneficial. Stash also offers a retirement account with a growth account of $3 per month. Then there is Stash+, available at $9 per month, where you get investment accounts for two children, double stock rewards, monthly market insights reports, and insurance.
What's great about Stash is you can buy fractional shares using the platform, which is handy for buying Microsoft stock. If you think that the shares are steeply priced, you can choose to buy fractional shares at a cost that you can afford.
You can invest in other stocks and ETFs through Stash. Any dividends from stocks in your portfolio are also automatically reinvested for you.
Pros and cons
Pros
- Fractional shares of stocks sold
- No minimum deposit to open an account
- Minimum monthly fees, starting as low as $3
- Dividends are automatically reinvested
Cons
- The focus will be on your goals and not on individual stocks
M1 Finance
M1 Finance has a personalized take on robo-advising. It is geared towards long-term investors who aim to build a strong portfolio at low costs. M1 Finance does not provide a financial advisor, but it allows you to make your financial goals, build a portfolio, and manage it through its simple platform around pie investing. Hence, every investor’s portfolio is broken down into a pie chart so it is easy to understand how your assets are distributed.
You can choose one of the professionally curated portfolios based on different investment strategies and risk tolerance levels to serve as the base of your portfolio. However, for those wanting Microsoft, you can also create custom pies by choosing from the different investment products, including stocks, mutual funds, and ETFs. You can also purchase fractional shares through M1 Finance.
M1 Finance offers an individual account, joint investment account, trust account, and retirement account. The trades are commission-free, but a minimum balance requirement is $100 for taxable accounts and $500 for retirement accounts. If you have a portfolio only made of stocks, it will not incur a management fee. If the account has been inactive for 90 days, there is a maintenance fee and an account termination fee. You can get an afternoon trading window and set automated trading rules with M1 Plus, offered for $36 annually.
Pros and cons
Pros
- Fractional shares of stocks sold
- Trades are commission-free
- Several account types to choose from
Cons
- No financial advisors
- High minimum deposit
- Account inactivity fees
- The pies can become overwhelming for a beginner
Step 2: Research Microsoft shares
Microsoft Corporation is a technology company listed on NASDAQ under the ticker MSFT. It develops, manufactures, and sells cloud systems, computer software, computing devices, electronics, and other products. Microsoft was founded by Bill Gates and Paul Allen on April 4, 1975, in Redmond, Washington. Satya Nadella, the company's biggest shareholder, has also served as its chief executive officer since 2014.
Its most popular products include Microsoft Surface computers and Xbox video game consoles. Microsoft is the largest company in the world with a market cap of $2.94 trillion. The company has been dominating the computer landscape for many decades. It owns the popular professional networking sites LinkedIn, GitHub, and Skype.
Microsoft price history
Microsoft has grown significantly over the years, and the best way to take advantage of this growth is to invest in an IPO. The stock debuted on March 13, 1986, at $21 and is now available on May 2 for $395.12 per share. According to a calculator on the company's website, if you had invested $1,000 in Microsoft in the IPO, your shares would be worth $3,949,400 today, including the split adjustments.
Microsoft conducted stock splits in 1987, 1990, 1991, 1992, 1994, 1996, 1998, 1999, and 2003.
Microsoft dividend information
Microsoft has consistently paid cash dividends over the years. It is considered a dividend aristocrat and is a great choice for investors looking to generate passive income through dividends. It recently paid a quarterly dividend of $0.75 per share. It has a dividend yield of 0.76% and an annualized dividend of $3.
Best features of Microsoft stock
Microsoft reported a revenue of $61.9 billion for the third quarter ended on March 31, 2024. This is an 17% increase over the previous year. It continues to grow in terms of clients, revenue, and market share, and it has paid quarterly dividends since 2012. Microsoft has enjoyed free cash flow for many years, which has made it possible to pay out regular dividends. The company has split stock in the past, and there is no guarantee it will happen. In case of a stock split, your investment will increase in value and holding.
Microsoft products are geared toward businesses and consumers. Its wide range of products meets the needs of various industries and competes against some of the top tech companies in the world. Microsoft, one of the oldest tech companies, enjoys a high market cap and valuation, attracting investors.
Microsoft transitioned its Office platform to a subscription service, which has worked well for the software business. It has 80.8 million Microsoft 365 consumer subscribers.
The company experienced an acceleration in growth in Azure, and the Azure segment revenue increased by 31%. The demand for cloud infrastructure is higher than ever, and Microsoft wants to make the most of it. It is also investing heavily in Artificial Intelligence, which could become a multi-million dollar opportunity for the company. It introduced Copilot to its office apps to bring AI to users. Microsoft also invested $13 billion in ChatGPT and incorporated it into its Bing Search engine. The future is AI, and Microsoft is already gearing up for it.
The company is well-positioned in the industry and continues to bring stiff competition to its competitors, such as Apple. It continues to expand its footprint globally and has announced new AI hub in London and is investing $2.9 billion for AI and cloud infrastructure in Japan. Since it has enough liquidity on hand, it can grow and innovate.
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Step 3: Open an account & buy Microsoft shares
Ready to purchase some shares? Then, it's time to open an online brokerage account. Using the best broker accounts, you can enjoy low-cost purchases and quick execution. I'll show you how easy it is to use M1 Finance as an example.
Head to the M1 Finance website and click on Get Started.
You will have to provide an email address and password and then be asked to verify your email. Once you are in, you create your pie. Choose three stocks from the hundreds of stocks and your pie will be ready. You can also choose more.
Next, you will be asked for an investment horizon. You can choose short, average, or long. Now, choose the type of investment account you want and fund it. (You can connect it to a bank account instantly.) You can begin your investment journey after linking the bank account.
After choosing the best stockbrokers, you must decide the price you want to buy the stock. There are two options- market price and the limit price. If you buy the stock at the current share price, it is at the market price, and when you set a limit for the purchase price, it is known as a limit price. Once you select your option and hit purchase, you are the proud owner of shares in Microsoft.
FAQs
How much were Microsoft shares when the company first went public?
Microsoft's stock price was $21 when it first went public in 1986 through an IPO.
How much does it cost to buy Microsoft shares today?
The closing price on May 2, 2024, was $395.12 per share.
Does Microsoft pay dividends?
Yes, it does.
What is the minimum number of Microsoft shares that I can buy?
You can purchase one share or a fractional share if you use the right brokerage.
The bottom line
If you are looking for growth stocks to buy and hold forever, Microsoft enjoys a strong reputation in the industry.
Using online brokerage accounts like Robinhood, Stash, or M1 Finance, you can enter the world of the stock market. You can also get expert investment advice for a fee. No matter the number of shares you choose to invest in, remember that the market is volatile. It will have ups and downs, but you must identify your risk appetite and take the right steps. Remember that you could make money and lose money. Volatility is a common factor in the stock market and could be profitable and risky. Identify your risk appetite and long-term goals before investing.
Related: How to Buy Apple Stock
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Editor
Vandita Jadeja is a financial writer and editor at Joywallet. She loves to read and write about money and brings a decade of experience from the financial industry.
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