Disclaimer: The following is for informational purposes only and not financial advice. Always do your own due diligence. I am not a licensed advisor.
Microsoft Stock Split History: Should You Buy MSFT Stock Now?
Microsoft (MSFT) is a tech giant that has captured the attention of investors worldwide for decades. Known for its innovation in AI, cloud computing, and personal computing, the company’s journey has been nothing short of remarkable. One of the key strategies that has contributed to Microsoft’s success is its history of stock splits. But with the company’s market cap reaching new heights, the question remains: Should you buy MSFT stock now? Let’s explore the stock split history of MSFT, its current performance, and the future outlook.
The History of Microsoft Stock Splits
Over the years, Microsoft has executed several stock splits, allowing investors to benefit from increased stock accessibility and improved liquidity.
The Early Days:
Microsoft went public on March 13, 1986, at $21 per share. Just over a year later, in September 1987, the company executed its first stock split. The split doubled the number of outstanding shares, making it more affordable for individual investors.
Subsequent Stock Splits:
Microsoft continued its strategy of splitting its stock throughout the late 80s and 90s. The company executed stock splits in April 1992, February 1996, and March 1999. Each split followed the same pattern—a two-for-one ratio that doubled the number of shares, while halving the share price.
The Last Split in 2003:
The last stock split occurred in February 2003, marking over two decades of stock splits. Since then, Microsoft’s stock price has steadily increased, with the company reaching a market cap of $3.7 trillion, racing toward the $4 trillion mark.
Why Did Microsoft Split Its Stock?
Stock splits are often used as a tool for boosting shareholder value and increasing market participation. By making shares more affordable, Microsoft was able to attract both individual and institutional investors. These stock splits played a crucial role in democratizing the ownership of Microsoft stock, allowing investors to benefit from the company’s growth and innovation.
Is Microsoft Stock a Good Buy in 2025?
With the recent surge in Microsoft’s stock price, many investors are wondering if it’s too late to buy MSFT stock. Here’s why Microsoft remains an attractive option:
1. Strong Financial Performance:
In its most recent quarterly earnings report, Microsoft posted a revenue of $76.4 billion, an 18% year-over-year growth. With a net income of $27.2 billion, the company continues to show impressive earnings growth despite its massive size. The growth in Microsoft’s cloud business, particularly Azure, is a major driver behind this strong performance.
2. Azure’s Impressive Growth:
Azure, Microsoft’s cloud computing platform, grew by 39% year-over-year, outpacing competitors like Amazon Web Services (AWS) and Google Cloud. This makes Azure a central component of Microsoft’s future growth strategy, and it’s likely to continue expanding, particularly as the AI market grows.
3. Strong Dividend and Buybacks:
Microsoft has long been a reliable dividend stock, offering consistent payouts to shareholders. The company’s current dividend yield is approximately 0.66%, and it continues to buy back stock, supporting its stock price and returning value to shareholders.
4. Artificial Intelligence and AI Integration:
Microsoft’s ongoing investment in AI, including its partnership with OpenAI and the integration of its Copilot tool across various applications, further strengthens its growth potential. The AI market is expected to quadruple in size by 2030, and Microsoft is well-positioned to capitalize on this expansion.
5. Risk Factors:
Despite its impressive growth, there are some risks associated with investing in Microsoft. One of the key risks is its high capital expenditure (capex), particularly in its AI and cloud initiatives. If growth slows or competition intensifies, it could affect free cash flow. Additionally, regulatory scrutiny, especially around its partnership with OpenAI, poses a potential threat.
Microsoft’s Stock Split: A Potentially Crucial Move
One question on many investors’ minds is whether Microsoft will conduct another stock split. While Microsoft has not split its stock since 2003, analysts are increasingly speculating that it could be overdue for another split, especially given its current valuation and the growing popularity of the company’s stock.
Stock splits generally increase stock liquidity and make shares more accessible, which can attract more retail investors. With Microsoft’s consistent growth, especially in the cloud and AI sectors, a stock split could further fuel interest in its stock.
Should You Buy MSFT Stock Now?
Based on Microsoft’s strong financials, growth in AI, and its dominance in the cloud computing space, MSFT stock remains a solid investment for long-term growth. While the stock may be priced at a premium, it’s important to remember that Microsoft’s strong earnings growth and cash flow generation support this valuation.
If you’re considering buying Microsoft stock, it’s wise to weigh the risks and rewards. Short-term volatility and regulatory concerns may cause some fluctuations in the stock price, but over the long term, Microsoft’s dominance in AI, cloud computing, and enterprise software positions it for continued success.
Final Verdict:
If you’re looking for a stable, long-term growth investment, Microsoft is still a strong buy. With its expansive portfolio, commitment to innovation, and leadership in cloud computing and AI, the company is well-positioned for future growth. Just make sure to monitor market conditions and potential regulatory impacts before making your decision.
