If You Invested $1,000 In Microsoft Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 ETF SPY total return over the last 12 months is 16.4%. But there is no question some big-name stocks performed better than others along the way.

Microsoft’s Big Run: One company that has been a strong investment in the last year has been professional software and cloud services giant Microsoft Corporation MSFT.

Fortunately for Microsoft investors, the COVID-19 pandemic actually boosted demand for Microsoft’s cloud services, remote work professional software and video game hardware and services. In the most recent quarter, Microsoft reported 50% Azure cloud services revenue growth.

At the beginning of 2020, Microsoft shares were trading at around $159. By the beginning of March, the stock was up to $165 despite news of the coronavirus spreading in China prompting concerns about a U.S. pandemic.

Microsoft ultimately bottomed at $132.52 during the pandemic-driven March sell-off. Fortunately for Microsoft investors, the dip did not last long. By June, Microsoft shares were back at new all-time highs above $190.

Unfortunately, while the rest of the market was making new highs in the second half of 2020, Microsoft was trading mostly sideways in a wide range of around $200 to around $230, though with a high of $232.86 in September.

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Microsoft In 2022, Beyond: Microsoft finally broke out to new highs in January 2021 and eventually made it as high as $349.67 in November. The company announced its largest acquisition in history in January 2022, a $68.7 billion buyout of video game developer Activision Blizzard, Inc. ATVI.

Since the deal was announced, Microsoft shares have pulled back to around $290.29.

While Microsoft’s valuation is currently historically high, it’s facing intense competition on all fronts and big tech companies are currently facing intense regulatory scrutiny. However, Microsoft is well-positioned in several of the biggest secular growth markets in tech. The company also has tremendously deep pockets to invest in innovation and can continue to find ways to put up impressive growth numbers quarter after quarter.

Microsoft investors who bought one year ago and held on have generated a nice return on their investment. In fact, $1,000 in Microsoft stock bought on Jan. 25, 2021, would be worth about $1,328 today, assuming reinvested dividends.

Looking ahead, analysts are expecting Microsoft to continue making new all-time highs in the next 12 months. The average price target among the 37 analysts covering the stock is $370, suggesting a 27.5% upside from current levels.