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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

How to buy and invest in Microsoft shares

Microsoft is one of the most successful technology companies in the world. Here’s everything you need to know about investing in them.

FTSE 100 Source: Adobe images

Written by

Kat Long

Kat Long

Financial writer

Article publication date:

Buying Microsoft stock: how to invest

  1. Research Microsoft shares
  2. Download the IG Invest app or open an online share dealing account
  3. Decide how much capital you want to invest
  4. Place your investment
  5. Monitor your position

How much will it cost to buy Microsoft stock? 

  FX conversion Standard commission
IG Invest 0.7% £0*
Hargreaves Lansdown 1% £11.95
AJ Bell 0.5% £5
Interactive Investor 1.5% £3.99

How to research Microsoft stock as an investment

Fundamental analysis is one of the best ways to assess the performance of Microsoft shares. It looks into financial reports and other external factors that may affect the stock’s performance.

You can analyse the health of the economy and its sectors, study news reports, consider the competition, explore supply and demand, and evaluate the cost of production. By gathering this information, you can identify Microsoft’s inherent value.

Earnings per share  

Earnings per share (EPS) determines the value attached to each share and whether the business is profitable or not. It’s calculated by dividing Microsoft’s profit by the number of outstanding shares

P/E ratio

P/E ratio outlines how much you must spend on shares to make $1 in profit. P/E ratio is calculated by dividing Microsoft’s current market value per share by its EPS

Once you’ve established the Microsoft’s P/E ratio, it’s recommended you compare it to other tech companies, like Apple and Alphabet. A low P/E ratio in comparison to competitors may suggest that Microsoft shares are overvalued, while a high P/E ratio could indicate it’s overvalued.

Business model

A business model refers to the different ways a company brings in a profit. Originally, Microsoft relied on licensing its software and the Windows operating system to make money, but its business model has evolved over the years. It all changed in 2014 when Microsoft started shifting its focus to product integration.

The Microsoft business model can be broken into four segments:

  • Productivity and business processes: information, communication and productivity
  • Intelligent cloud: server products and cloud services
  • Personal computing: user and developer interests
  • Corporate and other: alternative products and services

Why buy Microsoft shares?

Alongside Apple, Microsoft is considered one of the most successful tech companies in the world. Since its launch in 1975 the company has been at the forefront of technological advancements, and it continues to evolve, staying ahead of industry trends.

Over the next few years, AI is expected to continue to grow, and Microsoft’s early investment in this technology, particularly through its partnership with OpenAI, has positioned it as a market leader within the sector.

Microsoft is also a market leader in cloud computing. Its cloud platform Azure is seen as one of the best, second only to Amazon Web Services (AWS), and it continues to see increased growth as more and more businesses adopt a cloud-based environment.

Its cloud-based subscription service, Office 365, is also becoming increasingly popular and offers a consistent form of revenue for the company.

Investing in Microsoft shares provides a good balance of growth, innovation, and stability. Its quarterly dividend also helps make this stock an attractive option.

Find out how to buy Apple shares

What to do after you buy Microsoft shares

After buying Microsoft shares, it’s essential to keep an eye on its performance using our app or online platform. Staying informed about market movements allows you to identify potential opportunities and risks and act accordingly.