Is Microsoft a Good Stock to Buy?

Ever since Bill Gates wowed the world during the personal computing revolution, Microsoft has been a staple of the stock market and a favorite amongst tech-minded investors. A leader in operating systems, cloud computing and other computing verticals, Microsoft was recently in the news from it’s investment in OpenAi, the fast-growing AI giant behind ChatGPT. As a result, many investors are now wondering whether Microsoft is a good stock to buy.

What is Microsoft?

Microsoft is a software powerhouse founded back in 1975 by the dynamic duo of Bill Gates and Paul Allen, that has taken the tech world by storm ever since. 

You might know Microsoft for their legendary operating system, Microsoft Windows, a game-changer for personal computing and is used by billions of people all over the world. 

Windows is just one in an impactful product line including Office Suite, Azure Cloud, Xbox, and Surface devices.

Microsoft has also made some savvy strategic acquisitions over the years. It owns the largest business network in the world, LinkedIn, as well as Github, arguably the largest developer network in the world. In addition, Microsoft recently announced a ‘new multiyear, multibillion-dollar investment with the artificial intelligence lab OpenAI,’ the makers of ChatGPT.

Is Microsoft a Profitable Company?

Microsoft first became profitable in the fiscal year ending June 30, 1990. Back then, Microsoft was already a big deal in the tech industry, raking in some serious cash four years after its IPO. 

Today, it remains a giant of the tech world, with a finger in just about every pie you can imagine, from operating systems to gaming to cloud computing. Microsoft earned $86b in profit over the 12 months ending on July 1, 2022. This represents an 18% jump from the previous year in which it earned $73b. Free cash flow also jumped 16% in 2022 to $65b.

How to Buy Microsoft Stock

If you’re ready to buy into Microsoft’s vision and own stock, the first step would be to open a brokerage account with a trusted broker. Then, you’ll need to fund your account in order to purchase Microsoft stock. Depending on your broker, you can typically fund your account through a bank wire or by using a credit card. Once your account is funded, you’re ready to set an order to buy a specified amount of Microsoft shares.

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Where to Buy Microsoft Stock: Choosing the Right Broker

TFG’s simple framework helps you narrow down the many available online brokers by asking the right questions. Here are five questions to ask before signing up for an online broker. 

  1. What are customers saying about this broker? Look around at sites like Trustpilot and G2 to gauge customer sentiment about a broker. 
  2. Does this broker operate in my location? Nothing is more annoying than signing up for a broker and finding out they don’t fully support your country.
  3. Does this broker have the necessary licensing? Regulated companies, those with the correct licenses to allow them to offer financial products, are far more trustworthy than brokers that lack the required licenses to operate.
  4. What fees does this broker charge? When looking at the fees charged by brokers, its important to consider deposit fees, withdrawal fees and trading fees. 

To simplify the selection process for you, we’ve included four of our favorite brokers in TFGs Broker’s Guide.

Should You Invest $1,000 in Microsoft Today?

Microsoft stock hit a high of $349.67 in November 2021 and dropped steadily throughout 2022. But it’s perked up this year, reaching a 2022 low of $219. In 2023, MSFT stock has rebounded slightly and is now hovering between $250 and $270. Whether the price will rise toward its all-time high and beyond depends on both macroeconomic factors and Microsoft’s ability to execute its vision. 

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