Throughout the years, Microsoft (NASDAQ: MSFT) is a stock that minted many millionaires. A modest $10,000 investment back in 1994 would now be worth over $1 million dollars today, with the stock up more than 100x over the past 30 years.
While you'll likely need to start with more than $10,000, an investment in Microsoft can still play a key role in being a part of a millionaire-making portfolio. While the law of large numbers comes into play, it is worth noting that Microsoft was the largest company in the S&P 500, starting 2004 with a market cap of just over $295 billion.
Today, the stock has a market cap of over $3 trillion, so it was able to increase tenfold despite starting as the largest company in the world. Notably, its run during this stretch didn't even start great, as by the end of 2004, it had a negative return and was down to being the third-largest company in the S&P.
With that said, let's look at the attributes that could help Microsoft mint more millionaires in the years ahead.
An AI winner
One of the attributes that has helped Microsoft become and stay one of the largest companies in the world has been its ability to innovate and adapt. The company's bread and butter has long been its computer operating system and software portfolio of productivity tools, such as Word and Excel. And those are still important parts of its business.
However, the company adapted over the years. Today, one of the most important and fastest-growing parts of its business is its cloud computing division, Azure, which it originally launched in 2008. However, this business evolved immensely over the years, with Azure taking off after Microsoft moved away from only running Windows applications, allowing Linux, and began focusing on web-based tools.
More recently, Microsoft has been at the forefront of artificial intelligence (AI) through its large investment in OpenAI, which has helped power its Azure business. Azure has a pay-as-you-go consumption model, and customers have been clamoring for its services, which help them create their own AI agents and copilots. This has also increased the usage of Microsoft's data and analytics services.
Last quarter, Microsoft saw its Azure revenue soar 33% (34% in constant currency), accelerating from the 29% (30% in constant currency) growth it saw the prior quarter. This area remains a huge opportunity for Microsoft, as growth could be more if not for capacity constraints. The company is pouring money into new data centers to take advantage of the huge opportunity still ahead.
Cloud computing is not the only area where Microsoft has shown an ability to innovate and adapt. Moving its suite of productivity tools to a SaaS (software-as-a-service) model back in 2011 with the introduction of Microsoft 365 helped spur growth. Meanwhile, this is another big area of opportunity for the company when it comes to AI.
Microsoft developed a number of Copilot AI assistants for its Microsoft 365 offerings to help improve worker productivity. Earlier this year, it introduced some important copilot updates with attractive features. One of the most intriguing was integrating Python into Excel so that users could work with the programming language using only natural language, allowing everyday users not trained on Python to perform more advanced forecasting, data visualization, and risk analysis tasks. Meanwhile, other new copilot features included being able to create PowerPoint presentations using natural language and Word Copilot being able to pull in data from various types of documents. These are just a few examples of what users can do with its copilots, and they will continue to advance.
With Microsoft charging $30 a month per user for the use of its Microsoft 365 copilots, plus the annual cost of a Microsoft 365 subscription, this is a big opportunity for the company. In fact, in some cases, the price of copilots is similar or even more than the cost of some Microsoft 365 plans.
Image source: Getty Images.
Is now the time to buy Microsoft stock?
In order for a company and stock to be great performers over very long periods of time, they generally have to be adaptable. That is something that Microsoft has proven to be, which should help drive the stock's performance over the next 20 to 30 years.
AI is looking to be the next big tech evolution, and Microsoft was at the forefront of leading the charge by adopting this technology to its offerings. With AI still in its early innings, the company should see a lot of future growth in this area.
From a valuation perspective, the stock currently trades at a forward price-to-earnings (P/E) ratio of just over 28, which is below where it has traded for much of the year, although above where it traded last year.
MSFT PE Ratio (Forward 1y) data by YCharts
While its stock is not on the clearance rack, Microsoft can be a core portfolio holding given its long track record of innovation and its AI opportunities ahead. While the stock is unlikely to create new millionaires with a small investment, it can certainly be a key component of a millionaire-making portfolio.
Should you invest $1,000 in Microsoft right now?
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
