If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today

Microsoft stock, which is trading close to all-time highs, has been a terrific buy-and-hold bet.

Microsoft sign at World Mobil Congress msft stock
(Image credit: Getty Images)

Not too long ago, Microsoft (MSFT) stock's glory days looked to be behind it as sales of desktop PCs slipped into a seemingly irreversible decline amid the consumer shift to mobile technology. Although the dot-com days of the 1990s minted many a "Microsoft millionaire," the aftermath of the tech bust led Microsoft stock to trade mostly sideways for more than a decade.

But the past 10 years have been nothing short of a renaissance for the software giant. When CEO Satya Nadella ascended to the top job in 2014, he not only began instituting cultural changes, he transformed Microsoft's core strategy too. Cloud computing and subscription-based services were in; the days of selling software licenses via physical compact disks were passé.

That focus on enterprise customers and – most importantly – Microsoft's shift to selling cloud-based services such as Azure and Office 365 have been an astounding success. Today, Microsoft is a dominant player in cloud computing – and MSFT's stock price proves it. 

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Indeed, Microsoft stock has been so remunerative since Nadella took over that long-term investors might not even notice that dud decade-plus following the tech bust. Between January 1990 and December 2020, shares in Microsoft, which joined the Dow in 1999 at the height of the dot-com boom, generated a total return of 57,730%. The S&P 500's total return came to a mere 1,950% over the same span.

Along the way, Microsoft stock generated $1.91 trillion in wealth for shareholders, good for an annualized dollar weighted return of 19.2%, according to Hendrik Bessembinder, professor of finance at the W.P. Carey School of Business at Arizona State University.

Only Apple (AAPL) generated more wealth for shareholders over those three decades, making MSFT one of the very best stocks of the past 30 years, per Bessembinder's findings, which account for cash flows in and out of the business and other adjustments.

The bottom line on Microsoft stock

MSFT stock

(Image credit: YCharts)

With Microsoft trading at fresh all-time highs in early November, it seemed like a good time to see what $1,000 invested in Microsoft stock 20 years ago would be worth today.

Have a look at the above chart and you'll see that if you put a grand into MSFT stock two decades ago, today it would be worth more than $22,000. The same amount invested in the S&P 500 20 years ago would theoretically be worth a little more than $6,000 today.  

Over its entire life as a publicly traded company, MSFT stock has generated an annualized total return (price change plus dividends) of almost 27%. The S&P 500's total return comes to 10% over the same period. Analysts very much expect Microsoft stock to continue to generate market-beating returns.

Of the 53 analysts issuing opinions on Microsoft stock surveyed by S&P Global Market Intelligence, 35 call it a Strong Buy, 13 say Buy and five have it at Hold. That works out to a consensus recommendation of Strong Buy, making MSFT a top-rated name among Dow Jones stocks.

Have a look at stocks billionaires are buying or hedge funds' top blue chip stocks and you'll see that much of the putative smart money agrees with Wall Street's assessment. 

More Stocks of the Past 20 Years

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.