Investors who have held stocks since 2016 have generally seen strong gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over the past five years is 120%. But there’s no doubt that some big-name stocks have performed better than others along the way.
Microsoft Bug Run: A title that has exploded since 2016 is a tech giant Microsoft Corporation (NASDAQ: MSFT).
Since 2016, Microsoft has continued to pivot from a business model driven by components such as PCs and servers to one centered around its Azure cloud services. Besides Microsoft’s cloud business, key sales drivers include Microsoft Office 360, its professional social network LinkedIn (acquired in 2016) and its video game console Xbox.
Microsoft was one of the hardest-hit stocks in the dotcom bubble in 2000, and it took the company 17 years to get back to its peak market capitalization of around $600 billion.
At the start of 2016, Microsoft shares were trading at around $54. The stock hit its five-year low in late 2016, falling to $39.72 before the company’s cloud investment efforts really started to gain traction.
From then on, the stock rose steadily over the next few years, hitting $100 in mid-2018 and $150 for the first time in late 2019. Microsoft also hit a big milestone in 2019 by hitting a market cap of $1 trillion.
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Microsoft in 2021, beyond: Microsoft peaked at $190.70 in early 2020 before the COVID-19 pandemic sell-off took the stock down to $135 in March. Luckily for Microsoft investors, Microsoft’s cloud services, Office 365 communications platforms, and Teams were perfectly positioned to benefit from a work-from-home environment.
Early in the summer, Microsoft shares hit new all-time highs, peaking at $242.64 in January 2021.
Microsoft investors who bought and held for a volatile five-year period made a significant profit. In fact, $1,000 of Microsoft stock purchased in 2016 would be worth about $5,030 today, assuming reinvested dividends.
Looking ahead, analysts expect Microsoft to continue its upward push over the next 12 months. The average price target among the 31 analysts covering the stock is $275, suggesting a 17% upside from current levels.
(Photo: Coolcesar, via WikiCommons)
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