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Recovering from their hiccups at the end of September, Microsoft (NASDAQ:MSFT) stocks rebounded. In fact, MSFT stock has just hit a new all-time high after the release of its last earnings report on October 26.

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But when it comes to investing in this tech titan, its short-term price performance isn’t what you should be focusing on.

Most important is its continued appeal as a buy and hold position. From time to time, the actions will go on higher outsized strokes. Other times it will see volatility and make large, temporary downward moves.

Yet over the long term, MSFT stock should continue to provide solid returns to investors.

After its incredible journey through the Covid-19 pandemic, it is up more than 100%. Impressive, considering that even at around $ 150 a share, it already had a valuation of over $ 1,000 billion. However, don’t take its high market cap ($ 2.3 trillion) to mean it’s peaked.

If you own it today, there is merit in staying long and holding on. Let’s take a closer look at what to expect from Microsoft stocks going forward.

How could MSFT actions behave after the pandemic

As with other tech titans, the so-called pandemic tailwinds have played a significant role in the rise in MSFT stock prices. Due to the Covid-19 lockdowns and subsequent ‘work from home’ trends, the growth of its Azure cloud business has accelerated. The same goes for the growth of its cloud-based Office 365 platform.

With that, you might be concerned that as the world is in “recovery mode”, slower growth awaits us. Still, with trends such as the ‘Big Shuffle’ (permanent remote / home hybrid post-Covid workplace), as well as analysts’ estimates of 14.7% profit growth for the next fiscal year ( end of June 2023)? I wouldn’t be too worried about the stock having a post-virus ‘hangover’ that we might see with other tech names.

If that is not enough, it is not just the prospect of continued strong earnings that portends progressive gains for MSFT stock. As I touched on earlier this month, the company’s dividend and buyback policy also bodes well for stocks.

Recently, the company took two steps that return capital to shareholders. First, it increased its quarterly dividend from 56 cents per quarter to 62 cents per quarter. Along with this, Microsoft’s board of directors has authorized a new share buyback program. Under this program, the company is able to repurchase up to $ 60 billion in shares.

Dividend increases and buybacks alone won’t trigger a big rally. Yet, by working in tandem with continued earnings growth, that’s more than enough to generate gradual but solid long-term gains.

The verdict with MSFT Stock

Trading at a price-to-earnings ratio of 35x, Microsoft stocks could be trading at a much higher valuation today than they have in most of the past 10 years.

But market conditions (as seen with the valuations of other tech stocks) are helping to support this multiple. In addition, the acceleration in growth observed by Microsoft since the late 2010s – thanks to its exposure to cloud computing trends – also helps to justify this assessment.

Gains from now can come at a more gradual rate. This is all the more true as it has already climbed 48% since the start of the year and has more than doubled since March 2020.

But, regardless, MSFT stock is still a solid game for the long haul that you should keep in your portfolio.

As of the publication date, Louis Navellier had a long position on MSFT. Louis Navellier did not have (directly or indirectly) any other position on the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of

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