If You Invested $1,000 In Microsoft 40 Years Ago, Here's How Much Money You'd Have Today

Investors are always playing the "what if" game. While professionals in the market like Jim Cramer and Warren Buffett suggest that looking back over your past failings is a great way to learn and grow into the future, it's also a source for thinking about what could have been. Plenty of explosive periods of growth seem obvious when looking back with the clarity of hindsight. In 2024, Nvidia rocketed up to a market capitalization of well over $3 trillion, making it the second-most valuable company in the world (and often considered the "world's most important stock").

Looking back, the positioning of Nvidia as potentially the most sophisticated processing power creator on the planet set it up for incredible and obvious value heading into a sprint toward constantly improving generative AI tools. However, there's another companion at the top of this tech sector heap that investors frequently look to. Microsoft (Nasdaq: MSFT) is trading at around $450 per share and has spent most of 2024 in the low to mid $400 range. As the definitive finishing touch on a top-three powerhouse picture (with Nvidia, Apple, and Microsoft all with $3 trillion-plus market caps versus the next highest at a low $2 trillion figure – Amazon) and often ranked as the most valuable company throughout its history, it's easy to see why investors wish they could go back in time and put it all on the creator of Windows. But what would a decent investment in the brand back in its formational years have yielded an investor today?

A $1,000 investment in 1986 when Microsoft went public would equate to an equity value of some $4.3 million in December 2024.A single share purchased at the time Microsoft went public would be worth around $130,000 today, for context.

The reason for this tremendous growth in value lies in the company's stock splits. A stock split reduces the price per share of a company, giving owners more total shares in the process. An investor holding a single, $1,000 share will instead see two $500 shares in their account or three $333 shares after a split takes place. With Microsoft's nine historical splits, a single share purchased in its first days on the market would result in 288 shares today. Coupled with the company's tremendous growth in total value, and its massive share price increase in recent years, hypothetical early investors holding onto their equity would clean up if they chose to sell today. 

It's worth noting that Microsoft stock stood at an all time high a few years ago, too. Before the pandemic era market conditions took root and rattled the entire marketplace, Microsoft was sitting in the $350 range. A sale back then would have yielded an investor similar, but slightly shorter, returns. Selling at the precipice of a massive bear market downturn might seem like the sensible move, but not even two years after stocks went tumbling many had surpassed their previous high water marks. Microsoft crossed this threshold in June 2023 and hasn't looked back since.

In addition to the realities of stock splits and considerations over whether to sell during a dramatic market meltdown like the one that happened in 2020, there's a lot more to keep in mind. For one thing, Microsoft has consistently performed as a stable, productive stock. The nine splits the stock has experienced make looking back without technical analysis tools a little difficult for the retail investor, too. However, with the last split taking place in 2003, it's clear that the company experienced essentially static performance through a timeline of over a decade. After the dot-com bubble and the last split a few years later, Microsoft's share price essentially entered a holding pattern.

Some investors might have opted to jump ship during this time. A $1,000 investment at the company's IPO would have yielded 47.6 shares at an initial $21 price, resulting in roughly 13,714.3 shares after the 2003 split. With share price standing at about the same figure, a sell off during this decade of flatness would have yielded a payout near $288,000. Investors looking to move on to find more profitable opportunities might have opted to cash in on their earnings and invest in something else, missing out on the explosive growth that started to ramp up in 2013 but really found its stride a few years later.