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How to buy Microsoft shares
This guide will look at the history of Microsoft, the latest news regarding the company, the best online brokerages, and Microsoft’s recent stock market performance. Read more to find out which factors you should look out for before investing.
Compare the best Microsoft trading platforms
You can get started on the market straight away by by visiting one the brokers below. We’ve assessed all the best platforms to come up with this list, so you can be confident in whichever one you choose. Otherwise, keep reading for more information on Microsoft.
How to buy Microsoft stock, a step-by-step guide
It’s relatively simple to get your hands on Microsoft shares, even for the most inexperienced investor. The following list explains the steps you need to take to make your first investment.
- Choose a broker. The first thing you need to do is find an online trading platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Microsoft shares.
- Place an order for MSFT stock. Search for Microsoft’s ticker symbol (MSFT) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you’re looking for and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Microsoft shares will be listed in your account. Congratulations, you’ve just bought shares in Microsoft! Explore the Invezz website for more advice on stocks & shares.
What is Microsoft? And should I invest?
Microsoft (NASDAQ: MSFT) is an American technology company, the largest software maker in the world and one of the big five US tech companies in the US along with Amazon, Apple, Facebook and Google. Founded by Bill Gates and Paul Allen in 1975, it has grown to dominate the PC operating system market and is a diverse ‘big tech’ company.
Its underlying strength has been helped in recent years by Microsoft moving away from just operating systems and hardware by acquiring LinkedIn and Skype, along with investing in its gaming division and Azure cloud software offering. That has softened the blow of competition from other firms like Google and Apple, who have been able to win a greater market share of mobile operating systems.
Microsoft has almost always been a good investment and its performance in recent years in particular is extremely strong. That doesn’t guarantee its future success, Microsoft shares are on the expensive side with the stock at a high value relative to its earnings, but it is a company set up well to deal with the challenges of the future. Read on to get more information before deciding whether or not to buy.
How has the company performed in recent years?
Microsoft has been a good investment for some time but since 2015 the trend line has been a steep increase. In recent years it has seen demand for cloud services rise to make up a third of its entire revenue – even before the pandemic hit – while traditional software continued to perform strongly. Microsoft’s unique position where they are able to offer ‘hybrid’ software solutions helped drive a 350% increase in value between 2015-2020 and it closed above $220.
The pandemic hurt Microsoft’s hardware and traditional desktop computing revenue and MSFT fell briefly in the aftermath, but the scale of the transformation to working and learning from home was a big boost to the tech industry as a whole. Microsoft was no different, as it experienced “two years worth of digital transformation in two months” according to CEO Satya Naddela.
After years of growth, MSFT stock saw another 20% increase in value over the course of 2020, driven by a huge rise in home working and gaming to more than counterbalance a fall in demand for hardware and business investment.
Is it a good time to buy MSFT shares now?
Microsoft has rarely been a bad investment, its long history of stable leadership combined with strong revenue streams and a varied portfolio have kept it at the technological forefront for a long time. The pandemic only accelerated a move to cloud computing and it continues to develop its Azure platform to offer flexible cloud hosting and storage. The main question on the horizon is whether its performance can match up to the stock’s high valuation.
Some secondary concerns remain over whether Microsoft could fall foul of regulators and be subject to the sort of lawsuits which have hit Google and Facebook in recent years. Big tech has so far weathered those potential pitfalls and continued to grow exponentially, but tougher regulators and bad PR could eventually take their toll.
There could also be opportunities for short term traders based on Microsoft’s price trends, with growth accompanied by spells where the stock meets resistance and drops down to support levels before returning to an upward trend. You can find our more extensive fundamental analysis below, along with all the latest news from Microsoft and its big tech competitors.
Microsoft shares remain in a bull market after better than expected third-quarter results
Microsoft, Intel, IBM price analysis roundup
Amazon stock price consolidating as its row with Microsoft intensifies
Buying, selling and trading Microsoft shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before you get going.
- Research the company. You should always examine the fundamentals of a company first. What is Microsoft? How did the company get its start? How did it grow? Is Microsoft’s revenue and profit growth picking up? Is the company innovating? The more you know about Microsoft, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in stock market investment, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our thorough broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. The news section of our website can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of what you can do with Microsoft shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for Microsoft stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Microsoft shares, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold shares for long periods of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Microsoft’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Microsoft shares through flipping them quickly, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing an aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either by utilising dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into MSFT shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our simple stock trading course and read our basic guide to CFD trading to get you up to speed.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to fund your account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.