Microsoft stands as one of the world’s largest and consistently profitable companies. Its success spans decades and is attributed to its history, the presence of a charismatic founder, regular dividends, and new ventures like OpenAI’s ChatGPT.
If you want to know how to buy Microsoft shares, read on. This article will introduce you to a quick, step-by-step guide on how to invest in Microsoft.
What is Microsoft?
Microsoft Corporation (ticker symbol: MSFT) holds its position as one of the globe’s largest multinational technology companies, based in the United States. It has dominated the market for numerous decades.
The company is renowned for its flagship creation, the Windows operating system. Additionally, Microsoft provides an array of software products and services, catering to both individual users and institutions.
- Company name: Microsoft Corporation
- Ticker: MSFT
- ISIN: US5949181045
- Stock exchange: Nasdaq
Who is Bill Gates?
The well-known figure behind Microsoft’s establishment is Bill Gates. Beyond his role as a founder, Gates has garnered recognition as a remarkable investor, business magnate, software developer, author, and philanthropist. His contributions extend far beyond the realm of technology.
Why should you buy Microsoft shares?
There are several compelling reasons for investors to consider acquiring Microsoft shares. Let’s explore some of them:
Diverse product & service Portfolio
Microsoft’s product diversity, meeting crucial societal needs, is a prime consideration. Beyond the widely used Windows operating system, Microsoft offers a broad array of its own branded products. Many of these products dominate their respective sectors or markets. Notable ones include:
- Microsoft 365 (formerly known as Microsoft Office): Used globally in homes, schools, businesses, and more. It encompasses familiar tools like Word, Excel, and PowerPoint, essential for various projects.
- Microsoft Teams: Elevates remote communication with features like chat, video meetings, file sharing, and integrated applications.
- Microsoft Azure: A cloud computing platform enabling application development and management on a global scale.
- Outlook: A renowned email management tool.
- Microsoft Edge: A modern web browser replacing the iconic Internet Explorer.
- Xbox: Microsoft’s popular video game console.
- LinkedIn: The world’s largest job portal, bolstering Microsoft’s position in the job search sector.
This wide reach allows Microsoft to exert control over its business sectors, aiding in pricing strategies and maintaining consistent profit margins.
Moreover, Microsoft’s history of paying dividends for decades adds to its appeal as an investment.
Share price performance | How much are Microsoft’s shares worth?
Microsoft’s stock price growth is exceptional. Notably, its stock price demonstrates resilience during crises and bounces back to historical highs post-recovery. This consistent performance is noteworthy from the company’s foundation date to the present day.
Microsoft’s ongoing success and innovation
Microsoft’s impact extends beyond its current offerings. Continuously analysing market trends, the company develops new business sectors to cater to evolving societal and technological needs.
For instance, Microsoft’s recent investment of over 10 billion dollars in OpenAI, the parent company of ChatGPT, showcases its innovative pursuits. Bill Gates predicts the next technological revolution to involve AI assistance, exemplified by Microsoft’s incorporation of an assisted version of ChatGPT into their Bing search engine. This demonstrates the company’s ongoing commitment to innovation, even four decades after its founding.
What is the minimum lot for Microsoft shares?
To invest in Microsoft shares, you can start with a minimum lot of just 1 share.
How much does Microsoft pay in dividends?
Over its history, Microsoft has consistently paid dividends at a rate of around 1%, with an average annual growth of approximately 14%. These dividends are distributed quarterly, specifically in the months of March, June, September, and December. Here are the key figures:
- Dividends: 1%
- Annualised growth: 14%
- Dividend distribution: Quarterly
- As of the beginning of 2023, Microsoft’s dividend payment per share stood at $0.68.
Here is a history of dividend payments:
|Ex-Date 2023||Payment date 2023|
|15 February 2023||09 March 2023|
|17 May 2023||08 June 2023|
|16 August 2023||14 September 2023|
|15 November 2023||14 December 2023|
Here is the dividend growth rate of Microsoft’s dividend payments:
How to buy Microsoft shares step-by-step guide
To purchase Microsoft shares, follow these steps:
- Create an Account: Register with your preferred broker.
- Access the Broker’s Share Search: Utilise the broker’s search function.
- Search for Microsoft Shares: Use either the company name (Microsoft) or the ticker (MSFT) to find the shares.
- Determine Lot Size: Choose the number of shares you wish to purchase.
- Select Purchase Option: Decide whether you want to buy instantly at market price or place an order at your desired price.
Where to buy Microsoft shares in the UK
Selecting the right broker is crucial. Consider factors like fees, usability, and support when choosing from various options. Some popular choices include:
|Real shares||Yes||Yes||Yes||No (CFDs, spread betting)|
|Stock Commission||£0||£1.75 + £1||£0||£0|
How to buy Microsoft shares via Interactive Brokers | Practical example
Interactive Brokers is an online investment platform that offers brokerage services for stocks, bonds, ETFs, mutual funds and more, with low commissions and access to major global markets. In the above chart, there are also eToro, XTB and DEGIRO as options for Microsoft stocks, however, in this case, we will focus on explaining how to buy Microsoft shares via Interactive Brokers – the process is quite similar regardless of your chosen broker.
Step 1: Create an account with IBKR
Visit IBKR’s website, open an account, and provide your personal details. You’ll need to upload your ID and confirm your address.
Step 2: Buy Microsoft shares with IBKR
Search for Microsoft stocks using the company name, ticker (MSFT), or ISIN (US594949181045). You can choose from different exchanges like NASDAQ (NDQ), Tradegate (TDG), or Xetra (XET).
Next, decide on the type of order:
- Limit Order: Set the maximum price you’re willing to pay.
- Market Order: Specify the number of shares to be bought at the current price.
- Stop-Loss Order: Minimise losses by setting a limit price.
- Stop-Limit Order: Combine Stop Loss and Limit order benefits.
Have a look at stock order types if you’re unsure which one to choose.
Complete the order and confirm the details. Once executed, you’ll find Microsoft shares in your portfolio.
5 steps to summarise how to Buy Microsoft shares via Interactive Brokers
- Search for the share by name, ISIN (US594949181045) or symbol (MSFT).
- Choose the stock exchange where you want to buy shares: NASDAQ (NDQ), Tradegate (TDG) or Xetra (XET).
- Complete the required information.
- Before sending the order, the platform asks to verify that everything is correct and shows the commissions to be paid. Click on “Confirm” to send the order.
- Once the order is executed, you will be able to see Microsoft’s shares in your portfolio.
What companies compete with Microsoft?
Apple is a significant competitor for Microsoft, given their similar products (operating system, for instance). Google and Amazon also compete, especially in areas like cloud services. In general, Microsoft competes with the other FAANG companies.
Pros and cons of investing in Microsoft
Here is a summary of the pros and cons of investing in Microsoft:
|Pros of investing in Microsoft||Cons of investing in Microsoft|
|✅ It is one of the largest companies in the world||❌Microsoft is considered a mature company (not a growth stock)|
|✅ Excellent stock price performance||❌ Price performance can be affected by rising interest rates|
|✅ Widely used products and services|
|✅ Develops cutting-edge technology|
|✅ Growing dividends|
|✅ Diverse product portfolio|
Buy Microsoft shares: summary
With a rich history of innovation, a diverse range of products, steady dividend payments, and consistent stock market performance, Microsoft stands as a robust investment opportunity. Whether you’re drawn by its impressive product lineup, its resilient stock price, or its continuous pursuit of new ventures, Microsoft shares offer a gateway to participate in the tech giant’s ongoing journey of growth and innovation.
FAQS about Microsoft
Is investing in Microsoft suitable for beginners?
Microsoft’s long-standing stability, recognisable products, and consistent dividends make it an appealing option for beginners dipping their toes into investing. It’s crucial to perform your due diligence and understand your risk tolerance before investing.
What factors can impact Microsoft’s stock price?
Several factors can influence Microsoft’s stock price, including company performance, technological advancements, market trends, economic conditions, and competition. Keep an eye on industry developments and company news to gauge potential impacts.
Can I buy Microsoft shares directly from the company?
Microsoft does not offer a direct stock purchase plan (DSPP) to the general public. However, you can purchase its shares through brokerage platforms like Interactive Brokers, which provide access to various stock exchanges.