Investing in Microsoft
From its operating systems to its countless software products, Microsoft has been crowned one of the most important companies of the century. Now, do you want to know about an investment opportunity in Microsoft? If so, take a look and be amazed.
What is Microsoft?
We are certainly not talking about an ordinary company, quite the contrary. It is one of the most powerful companies ever created in the last 40 years. It is not for nothing that it is positioned as one of the most valued companies on Wall Street, surpassing the billion-dollar barrier in mid-2019.
This powerful computer empire, whose flagship product, Windows, has been part of one of the revolutions that have marked an entire era. Founded in 1975, the company’s main focus was the development of operating systems, software and hardware.
However, over the years Microsoft adopted a habit of “constantly evolving” so that today, they cover other technological sectors such as: the web, the cloud, artificial intelligence, video games, among many others.
Its main products are:
- The Xbox video game console
- Windows operating system (tool that integrates the famous office packages)
- Bing Search Engine
- Explorer web browser
- Edge web browser
- One Cloud services
All this, not to mention software acquisitions such as Skype or the social network for professionals such as LinkdIn.
It is for all this and more, that Microsoft shares are one of the most monitored in the world. Especially in the Spanish-speaking market, where different investors from Mexico, Spain or even Argentina want to own these shares as one of the most valuable assets in their portfolio, since it is the most known computer company in the world.
Why buy Microsoft stock?
Just to give you an idea of what we are talking about, since Microsoft went public in 1986, its shares have only multiplied how much? Well, more than 2300 times, all this, not including dividends. This makes it one of the largest companies with market capitalization in the world, with a value of over a trillion dollars.
Just to give you an idea, a person who invested $10,000 in its IPO would today have a wealth of over $23,000,000,000. This is just one of the reasons why you should own Microsoft stock.
All this incredible growth is also due to the fact that Microsoft’s business model is well diversified. Yes, this powerful multinational owns businesses within its organization such as: Surface, Linkedin, Bing, Azure or Xbox and these in turn sell in most countries of the world.
But that’s not all, Microsoft has incredible pricing power. What does this mean? Well, by having unique products on the market, the company has the luxury of increasing its prices without the demand resonating too much.
That’s why Microsoft foresees growth for many years to come. This is because the company maintains a fully competitive advantage and because of its pricing power. Thanks to this combination, the company can grow consistently by raising its prices over a long period of time.
Buying Microsorft shares: Advantages
- Microsoft has high profit margins. This is all thanks to the fact that it is a completely stable company with very low fixed costs. Quite simply, the company earns much more than it spends.
- Microsoft is reasonably priced. Although many find Microsoft’s price per share somewhat demanding, it is not as expensive as one might expect as one of the most traded companies in history.
- The cloud boosts Microsoft’s revenues. This business experienced a 30% increase in revenues compared to the previous year, reaching 13.3 billion dollars in the third fiscal quarter.
Buying Microsoft Stock: Risks and Disadvantages
- The valuation of shares can be excessive and it is very difficult to make much money when the price paid exceeds the real value of the asset.
- Its competition is still struggling to overtake the company. Although Linux is not a threat to Microsoft, Google has already put a plan in place with different software programs that could pose a risk in sales.
- There is a risk of being accused again of monopoly. If so, Microsoft will be forced to share some of its technological advances, so they may lose a large share of the market.
How to buy Microsoft shares
Now you know Microsoft, as well as the advantages and disadvantages of investing in its shares. It’s time to take action, and to do so, the first thing you should do is register with a broker. We will recommend you the best ones for this type of shares:
- Bankinter Broker
Now, how do I buy these shares? Very simple, just follow the steps below:
- Register with the broker of your choice for this transaction.
- Verify your account and log in.
- Transfer your investment balance to your brokerage account.
- Based on your balance, search the platform for Microsoft shares.
- Check the price of Google shares and calculate how many you can buy.
- Performs the purchase or sale transaction of Microsoft shares.
- The operation will be pending the crossing. Once the order is completed, you will have Microsoft shares in your account.