How to buy Microsoft stock (MSFT)—5 steps to invest
Microsoft first became a tech giant through personal computers and has continued to expand into multiple industries. The company gives investors exposure to cloud computing, artificial intelligence, business software, gaming and other verticals. Microsoft Cloud makes up most of the company’s total revenue, and artificial intelligence tailwinds should continue to propel the segment. This guide will reveal how to buy Microsoft stock and help you determine if Microsoft makes sense for your portfolio.
How to buy Microsoft stock
Buying Microsoft stock has been a solid long-term proposition for many investors. The stock tends to outperform the S&P 500 and dominates multiple markets. Follow these steps to buy Microsoft stock:
- 1.
Open a brokerage account: You can choose from several brokerage accounts. Comparing features, costs, investment options and other details will help you decide which one is right for your portfolio. You’ll have to provide personal information such as your name, email address and Social Security Number to create a brokerage account.
- 2.
Open an order ticket: You have to create an order ticket before trading any stock. Most brokerage firms make it easy to get started. An order ticket lets you specify whether you want to place a limit order or a market order. Limit orders only go through when they reach your desired price point, while market orders go through at the current price.
- 3.
Specify Microsoft stock: Microsoft trades under the ticker symbol MSFT. You’ll have to provide that symbol in most order tickets, but some brokerage firms let you find a company’s shares by providing its name (i.e. “Microsoft” and “MSFT” work).
- 4.
Decide on the number of shares: Every order ticket lets you specify how many shares you want to buy or sell. You can input the number of shares you want to buy and refresh the order ticket to see the current price per share. Most brokerage firms let you buy fractional shares. For example, you can buy 0.5 shares of Microsoft to start if you don’t have enough money to buy one full share.
- 5.
Execute the order: If everything looks good, the last step is to submit the order. The shares will immediately show up in your portfolio if you make a market order. All you have to do is refresh your screen after placing the order, and you will see your new MSFT shares. However, limit orders take some additional time, as the stock has to reach your desired price point first.
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About Microsoft
Microsoft was founded in 1975 and quickly emerged as the world’s largest personal computer company in the 1980s1. The company has also established itself as one of the top cloud computing firms through Microsoft Azure, which was launched in 20102. Microsoft has expanded into multiple industries by creating and acquiring new businesses. For instance, Microsoft launched Xbox in 20013 and acquired LinkedIn in 20164.
Is Microsoft a good stock to buy?
Microsoft has outperformed the S&P 500 for several years. The tech giant has generated a 5-year annualized return of 24.5% and a 10-year annualized return of 26.5%5. Meanwhile, the S&P 500 has only achieved five-year and 10-year annualized returns of 15.5%6 and 13.9%7, respectively. Microsoft’s five-year annualized returns also outperform Alphabet and Amazon8.
Azure should drive Microsoft’s stock higher as more businesses use cloud computing and artificial intelligence. Microsoft also has exceptional net profit margins that regularly hover above 30%.
The company continued that trend in the first quarter of fiscal 2025. Revenue of $65.6 billion (up by 16% YOY) and a net income of $24.7 billion (up by 11% YOY) translated into a 37.7% net profit margin.
Microsoft is a well-diversified corporation with multiple business segments that have delivered double-digit year-over-year revenue growth rates. The company’s significant investments into artificial intelligence position it nicely for an industry that is projected to maintain a compounded annual growth rate of 36.6%9 from now until 2030.
Pros and cons of buying Microsoft stocks
Pros
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Microsoft Cloud continues to grow and delivers high profit margins
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The tech giant is well-diversified across numerous industries
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Microsoft has outperformed the S&P 500 over the past five years
Cons
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Government scrutiny can limit the company’s ability to make acquisitions and expand into additional markets
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Microsoft faces competition from other tech giants like Amazon and Alphabet
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Microsoft has a higher P/E ratio than other tech giants
FAQs
Marc Guberti is a certified personal finance counselor and a freelance writer who resides in Scarsdale, New York. His work has been featured in US News & World Report, Newsweek, InvestorPlace, and other publications.
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