Last updated: August 4th, 2026
Of the Magnificent Seven stocks, no stock is more puzzling to me than Microsoft (MSFT). I have a volatile love/hate relationship with it.
My share portfolio has a significant amount of exposure to Microsoft – about 20% – and I’ve held the stock since early 2024, when it was around $415 per share.
And yet, every time I check my “gainz”, I get a reminder that MSFT is the second-lowest performing asset in my portfolio (after Strategy – Tim Saylor’s ultra-risky levered cryptocurrency venture).
It’s certainly been one of the losers among the Magnificent 7.
Above: Microsoft stock has outpaced the S&P500 by over 50% over the last 5 years. Zoom out for better long-term context.
How Has Microsoft Stock Performed?
The Microsoft stock price lagged the broader market in early 2025. But a strong third-quarter earnings report turned things around.
Revenues and profitability both exceeded analysts’ expectations, and its shares rose around 9%. But the stock price drove off the cliff shortly after, and has been rocky ever since.
Highlights from the fourth quarter 2025 earnings statement include:
- A 24% increase in diluted earnings per share (EPS) to $3.65, above the forecast $3.37.
- $76.4 billion in revenue, up 18% compared to the previous year, beating estimates by 3.54%.
- Revenues driven by its Azure cloud services grew 39%, significantly ahead of expectations.
Important!
Microsoft, Apple and Nvidia have been trading places throughout 2025 and 2026 as the largest companies by market cap. Currently Nvidia is number one, and Microsoft is third with a valuation of US$3.62 trillion.
Microsoft CEO Satya Nadella said on the earnings call: “We continue to lead the AI infrastructure wave, and took share every quarter this year.”
The markets didn’t buy it. The share price tumbled, bottoming out at a 2-year low of $356 in early 2026.
(Related: Best Trading Platforms In Australia Revealed.)
Despite a relatively strong earnings call in January, where the company reported revenue of $81.3 billion, up 17% year over year and EPS of $4.14, up 24% year over year.
Investors cited growing anxiety over soaring data centre and infrastructure costs – projected to reach roughly $190 billion – and circular finance deals.
Moreover, Azure and Copilot growth forecasts disappointed Wall Street when they missed aggressive expectations.
Did You Know?
Microsoft invested roughly $13 billion in OpenAI in exchange for a 25% stake in the company. The partnership has allowed Microsoft to integrate AI virtual assistants, or ‘Copilots’, into its software, although their initial sales to enterprise customers have been disappointing.
But Microsoft’s second earnings call of 2026 triggered the company’s best stock run in 26 years. The highlights from the call are:
- Paid Copilot seat growth from 10 million to 30 million in the last 2 years, offsetting some of the infrastructure cash outflows.
- Azure finally crossed $100B in annual revenue, showing a remarkable 43% YoY growth. Satya Nadella guided Azure’s growth for the rest of 2026 even higher, in the 45% territory.
- The company reported $90.01 billion in revenue (up 17.75% YOY), with diluted EPS of $4.74, beating estimates by 11.81%. This was the fifth consecutive EPS beat.
Will Rhind, CEO of ETF provider GraniteShares, said the 3-day, 24.9% rally was proof that investors are seeing a return from Microsoft’s investments in AI.
Goldman Sachs poured fuel on the fire, re-listing the company in its latest U.S. Conviction List, which spotlights the investment bank’s top picks.
The report emphasised a buy rating on the stock and set a price target of $640 per share, and at least 13 Wall Street analysts raised their price targets on the stock shortly after.
Morningstar analyst Dan Romanoff said in August that Microsoft’s robust demand indicators meant it remained a top stock pick.
(Related: 15 Best Stock Trading Apps In Australia.)
Its recent results reinforce the firm’s long-term view that cloud environments and AI adoption will expand.
Analysts at Rothschild & Co Redburn increased its price target for MSFT from US$550 to $600, with a ‘buy’ rating.
It argued that investor sentiment around Microsoft’s generative AI capabilities was “overly sceptical”.
The company’s Azure cloud service boomed in Q4 FY25, driven more by cloud migration and scaling than by AI adoption.
CEO Satya Nadella pointed to the example of Nestlé, which recently switched to Azure, migrating more than 200 SAP instances, 10,000-plus servers, and 1.2 petabytes of data.
The company has developed its own custom-designed AI processing chip, which could help it reduce its own reliance on Nvidia chips and claw back some market share from the breakout GPU supplier.
Some key risks for US markets generally include:
- Sentiment shifts triggered by ongoing inflationary pressure.
- Extended tech valuations triggering a major pullback, e.g., the tech bubble bursts.
- Changes to unemployment levels.
- The impact of Donald Trump’s promised tariffs and tax cuts in 2025.
The firm is facing a few legal and reputational issues, too:
- Co-founder of OpenAI, Elon Musk, is currently pursuing a lawsuit against OpenAI and Microsoft, alleging contract violations and antitrust activities, and has been vocal in his criticisms.
- A class action antitrust lawsuit was launched in October 2025 by consumers who claim Microsoft’s deal with OpenAI restrained market competition.
- Discontinued support for its Windows 10 operating system in October sparked widespread outrage among users, and also prompted a lawsuit.
Microsoft [MSFT] Performance Metrics To Watch.
Data about Microsoft drawn from Yahoo Finance as of August 2026:
| P/E Ratio | 25.81 |
| PEG Ratio (5 Year Expected) | 1.52 |
| Return on equity (ROE) | 34.28% |
| Shares Outstanding | 7.43B |
| 3-Month Average Volume | 20.3M |
How To Buy Microsoft Shares In 4 Steps.
Ready to buy?
Timing is critical when buying stocks, even when a company is clearly established and valuable, like Microsoft.
(Related: How To Buy Netflix Shares In Australia.)
Get professional financial advice to determine how to include US stocks in your portfolio to align with your goals, investing timeframe and appetite for risk.
Once you’ve got a solid plan, here’s how to use stock trading platforms to buy Microsoft shares or ETFs that include MSFT.
1. Understand Risks And Obligations Of Owning US Shares.
Several Australian-based brokers provide what’s known as CHESS-sponsored shares.
Whereas, when you buy US shares, brokers use a custodial model — they hold the shares for you.
You don’t have a choice in this, but it does mean you should be extra careful to choose a reputable broker likely to remain solvent.
You’ll receive all the same benefits and returns as any other shareholder. You retain control of your shares, and can sell them at any time.
Did You Know?
The custodial model can result in lower fees, and also allows for fractional investing — so, you can potentially buy part of a MSFT share if you can’t afford a whole share.
Owning Microsoft shares can also increase your tax liabilities. You’ll need to:
- Pay a 15% US withholding tax on dividends you earn from your MSFT shares.
- Pay tax to the ATO as any returns from your Microsoft stock counts as income.
You may be able to claim a foreign income tax offset, but it’s best to get advice from an accountant.
2. Select The Best Broker With Access To US Markets.
Choosing the best share trading platform comes down to your specific criteria, but generally people look for low-cost and easy-to-use apps.
Important criteria to factor in if you want to invest in Microsoft is whether the broker:
- Has access to the Nasdaq stock exchange where MSFT is listed.
- Has cost-effective foreign currency exchange fees in addition to low transaction fees.
Table stakes for a quality stockbroking app in Australia is being an ASIC-registered broker — check the platform’s website for their Australian Financial Services (AFS) Licence number, and double-check it’s valid via ASIC Connect.
Creating a new account on a share trading platform will feel familiar to any app, but there are usually some additional KYC (Know Your Customer) requirements.
Be prepared to provide:
- Your name, personal contact details and date of birth.
- Your tax file number (TFN).
- A verifiable form of identification.
- Your bank account number for adding and withdrawing funds.
- A completed W-8BEN form which is required by the U.S. authorities.
Important!
You can reduce the amount of tax you’ll pay from 30% to 15% by ensuring compliance with US tax laws by completing a W-8BEN form when you sign-up for a broker. The process for completing and submitting this form varies between apps.
3. Deposit Money And Make Your Trade.
Finally, you can execute the buy order from within your online brokerage account. Follow these steps:
- Deposit cash into your brokerage account from a linked bank account or credit card to fund your trades.
- Search for ‘MSFT’ or the ticker symbol of the ETF/fund you want to buy via the platform’s user interface.
- Enter the purchase amount or number of shares, assuming the Microsoft share price listed in the app matches your expectations.
- Choose an order type. You can buy immediately at the current market price or set limit or stop-loss orders to automatically buy when MSFT reaches a specific price point.
- Place your order. It can take up to two days for the transaction to be settled.
Above: Buying MSFT via one of my favourite trading apps, eToro.
Your FAQs About MSFT Stock, Answered.
Consider these facts before you become a Microsoft investor.
How Much AU$ Do I Need To Buy Microsoft Shares?
Each MSFT share is valued at around US$492 as of August 2026. For Australians looking to invest in the company, the cost of purchasing MSFT shares is impacted by:
- The current AU$/US$ exchange rate. When the Aussie is weaker, your purchasing power is reduced.
- Currency conversion and brokerage fees offered by the online stock broking app you use.
Which Indices Is MSFT Part Of?
Microsoft is a constituent of the three major US stock market indices used to benchmark share market performance:
- Dow Jones Industrial Average.
- S&P 500 index.
- Nasdaq Composite Index.
What ASX-Listed ETFs Hold MSFT?
Exposure to Microsoft shares can be gained through a number of exchange-traded funds (ETFs) listed on the Australian Securities Exchange (ASX), such as:
- Betashares NASDAQ 100 ETF (NDQ).
- Global X Morningstar Global Technology ETF (TECH).
- Global X FANG ETF (FANG).
- BlackRock iShares Global 100 ETF (100).
- Vanguard MSCI Index International Shares ETF (VGS).
Does Microsoft Pay Dividends?
Yes, Microsoft pays dividends. In 2026, it paid a record $0.91 dividend per share, up from US$0.83 per share in 2025,
Looking further back, the company paid relatively modest dividends of $0.75 in 2024, $0.68 per quarter in 2023 and $0.62 per quarter in 2022.
Has Microsoft Had A Stock Split?
Microsoft has had nine stock splits since it was publicly listed. The most recent split was a 2-for-1 common stock split in 2003.
Should You Buy Microsoft Stock?
We are journalists, not investment experts, so we do not offer investment advice.
What we do know is Microsoft is a long-standing company with a solid foundation for sustained growth through its cloud and productivity business streams, beyond the so-called ‘AI halo’ that’s driven optimism among investors.
However, its reemergence as an innovation leader — and the spike in its share price — is on the back of its moves in the AI sphere.
Competitive threats, economic shocks, and uncertainty about AI’s true utility could impact the MSFT share price going forward.
Disclaimer.
The information presented here is general in nature and does not endorse any investment product, market, provider, or service. It is not intended as financial advice or a recommendation to trade – or not to trade. Trading futures, shares, ETFs, options, CFDs, and forex involves a high level of risk and may result in significant losses, particularly when leverage is used. Past performance does not guarantee future results. Before trading, consider whether the product is appropriate for your circumstances and seek independent professional advice. Refer to the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) on the provider’s website.
Jody
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