How To Buy Microsoft Shares In The UK - Full Guide
Microsoft is one of the world’s leading tech companies with a market capitalization of about $1.828 trillion. This makes it a member of the so-called trillion-dollar club that includes US companies with a market capitalization of more than $1 trillion. In terms of market cap, it’s the world’s third-largest company conceding only Apple ($2.065 trillion) and Saudi Aramco ($1.890 trillion).
However, despite being such a huge company, Microsoft is not included among the five giant tech stocks known among investors under the name FAANG (Facebook, Amazon, Apple, Netflix, and Alphabet/Google). Still, some analysts believe that Microsoft's shares would be smart to purchase, and this huge tech company remains one of the most desirable shares for the investors.
If you have decided to become a shareholder of this company and still don’t know where to start, this article is for you. Here you will be guided on how to buy Microsoft shares in the UK, including a fully online process. You will also be introduced to some of the safe and reliable brokers and get the answer to the most common questions about buying Microsoft shares, including what factors make the Microsoft stock appealing, what are the risks of buying shares of this US-based tech giant, and more.
Microsoft shares are traded on NASDAQ under the ticker MSFT. This means that if you want to get started, you should, first of all, find a share broker that will give you access to buy and sell shares on this stock market.
As Microsoft has one of the most tradable and best-sold shares, you will probably find several brokers that can help you in this process. However, there are some factors to take into consideration when you search for an online trading platform that suits your needs in the best way. These factors can include fees they charge, accessible trading markets, safety, reliability, how easy it is to open an account on those platforms, margin requirements, etc.
Below, you will be introduced to one of the well-known stock brokers that you can use to buy Microsoft shares in the UK.
eToro - Buy & Sell Microsoft Shares with Zero-Commission in the UK
eToro is one of the world’s leading social trading platforms and offers hundreds of financial assets to trade on. Founded in 2006, this Israel-based company will get you access to the shares of giant companies like Netflix, Apple, Facebook, Microsoft, to name just a few. Along with this, eToro offers several benefits for which it became so popular.
The main attractions of eToro are its numerous social trading tools that users to have a personal profile, through which they get in touch with other investors, participate in discussions, explore other investor’s positions and, what is most appealing, automate your trading. For this purpose, you simply need to pick up a top trader and then copy his/her trades with the help of a social tool called CopyTrade.
Another thing about eToro is that it allows you to trade shares outright or using CFDs (Contracts for Differences) with leverage of 5:1. Consequently, if you want to get one share of Microsoft, the margin requirement is only 20% of the share price. And, when trading CFDs, the stockbroker is among those few trading platforms that don’t charge any commission fees for buying and selling the shares. What you need to pay is only buy and sell spread only.
Among other things that make eToro an excellent choice for UK investors is that it’s safe and easy to use. You don’t need to worry about the safety of your funds as they are regulated by top financial authorities, including FCA (United Kingdom), CySEC (Cyprus), and ASIC (Australia). Plus, all the personal information of its users is guarded under SSL encryption.
Coming to the usability of the platform, it is important to mention that eToro is very simple to use - you don’t even need to download the platform on your PC as it runs on web browsers and works very quickly. Finally, the broker supports many UK payment methods, including bank accounts, credit and debit cards and also e-wallets like Paypal.
To start trading Microsoft shares on eToro, you need to meet its minimum requirement of $200 (around £144).
Should You Buy Microsoft Shares Right Now?
Microsoft Inc. is one of the world’s biggest tech companies with a great success story. Most importantly, its stock prices had begun an incredible run since February 2014 when its current CEO, Satya Nadella, took the leadership from Steve Ballmer. While most stock market investors are not worried about the explosively running prices and are convinced that the company will continue its growth, other financial analysts and investors find it a bit suspicious with a potential risk of a tech bubble.
Therefore, it is strongly recommended to do your own research before coming to a final decision about buying Microsoft shares. In this part of the article, you will be introduced to Microsoft's share price history and financial analysts’ predictions about its outlook.
Microsoft Share Price History
The company was founded in 1975 by Bill Gates and Paul Allen and acquired huge success in a short time. Its first major hit was the MS-DOS operating system which was followed by Microsoft Windows in 1985. In 1990 the company launched its next prominent product - a set of work programs known under the name Microsoft Office. At the beginning of the 2000s, the company has also decided to enter the territory of console games.
The share price history of the company started in 1986 when the company went public at a share price of $21. As the name of the company had become quite popular, several investors wanted to get a share from it, which led to the Microsoft share price rise and the stock split 9 nine times. Over the years, the company’s share price was pretty stable, and it grew to only $43 by the year 2015.
Microsoft stock price growth for the last 20 years, for more data: macrotrends.net
However, over the course of 5 years, Microsoft's share price demonstrated explosive growth reaching $231.65 on September 02, 2020. After that, the US stock market's sell-off led to its share price drop, reaching $200 per share in November 2000. But once again, the company took another fire and hit its all-time high closing price of $244.99 per share on February 12, 2021.
Microsoft stock price growth for the last 6 months, for more data: finance.yahoo.com
Microsoft Share Price Prediction
According to CNN Business, the recent polls conducted among financial analysts show a positive outlook for Microsoft shares. Based on 30 analysts' forecasts for a 12-month price, Microsoft's share price has a high estimate of $315 and a low estimate of $245 with an average price target of $280, which is over %15 more than its last price of $242.39.
Stock Price Forecast
So, coming to the buy and sell recommendations, there is a consensus to buy Microsoft shares. 29 of 32 polled investment analysts recommend buying while none of the others recommends selling them. This means that despite the latest price drops of the company and the financials’ concerns about it being a tech bubble, Microsoft can still be considered a strong buy. There are, of course, some reasons that come to prove this opinion, which we will discuss a bit later.
Does Microsoft Pay Dividends?
Microsoft Corporation is one of the earliest and most popular tech dividend stocks in the world as it distributes a quarterly dividend to its stock owners. It has started paying dividends to its shareholders since 2004, thus becoming one of the few tech companies that pay dividends to their shareholders. To be honest, compared to other dividend stocks, Microsoft’s dividend is relatively low (around1-2%), however, this does not make the Microsoft stock less attractive, as long as the company annually increases its dividend percentage.
For More Microsoft Corporation Dividend History: nasdaq.com
3 Reasons To Consider Buying Microsoft Stock
Microsoft is a giant company that gained prominence in a very short time. In the 1990s, computers became small and affordable enough that any American could have them at their house. With the high demand for computers, also rose the demand for its operating system, which was the Microsoft-made Windows. It was so practical and user-friendly that consumers got adopted to it easily, and with every sold computer having Microsoft office and Windows installed on it, the company achieved tremendous dominance in the tech market in a very short time.
While Windows is still the main product of the company, Microsoft repeated its success story with other products too. Now it sells personal computers, phones, tablets, personal cloud storage, and what is most important - it made a huge lead into the gaming industry, and its Xbox products and other gaming contents increased the company’s revenue by 64%.
Microsoft has a history of 46 years - not too old for such a growth history. And, perhaps one of the main factors helping it to always remain on the top is its ability to adapt rapidly. The foundation of this adaptability was laid by its forward-thinking CEO, Satya Nadella, who took the company’s leadership in 2014 and reshaped it to the modern world.
With that in mind, here are the 3 reasons why the Microsoft stock still can be considered a must-buy.
The Impact of Coronavirus Pandemic
While the Covid-19 pandemic left its impact on the global economy, weakening also several Information Technologies businesses, Microsoft still remained among those strong companies who managed to adapt to the changes following the post-Covid-19 situation. One of the reasons why it did not fail is that the company has a bunch of products and services that are perfect for remote working. Apart from it, Microsoft's share price also doesn’t seem to have been affected by the pandemic as they are currently priced at a premium. These two factors indicate the strong flexibility of the company and build trust in it, promising that it can still survive even if the Covid-19 pandemic returns.
Its Cloud Services Are Growing
Microsoft's growth in the clouding system is another factor that compels people to invest in this company stock. Microsoft approached the cloud system in two ways - Firstly, it transitioned its set of productivity tools, Microsoft Office, into a cloud-based product that worked wonders for its software. Customers now can pay an annual subscription to the Office and get access across all its devices. Microsoft already has more than 47 million Microsoft 365 subscribers, which grow up to 28% every year.
The next crucial step toward cloud systems is the creation of its Azure cloud computing system. Created as Windows Azure, it was renamed to Microsoft Azure in 2014 and became a big seller among the users. It’s now the second-largest player in cloud computing systems, following only Amazon and its Amazon Web Services.
Microsoft Takes A Giant Leap Into The Gaming Industry
Another huge factor influencing Microsoft's revenue growth is its accent on the gaming industry. Microsoft is also famous for its Xbox gaming consoles that have revenue growth of 40%, leading to a 51% revenue growth to its overall gaming industry. In fact, it’s the third best-sold gaming console, following only those of Nintendo and Sony.
We are humbled by the record-breaking demand for Xbox Series X and S. Huge thanks to everyone for the excitement. ðŸ™— Xbox (@Xbox) September 22, 2020
If you weren't successful today be sure to sign up with retailers for updates, and expect more consoles to be available on November 10. ðŸ’š
But Microsoft does not seem to be content with only the Xbox gaming console. Recently, the company has made a $7.5 billion purchase of ZeniMax Media, the parent company of game developer Bethesda, following the company’s CEO Satya Nadella’s interview in which he stated that the company “will consider acquiring more video game studios in the near future.”
How to Buy Microsoft Shares - A Full Step by Step Guide with eToro
Now that you are provided with sufficient information about the Microsoft share price history, its prospective future growth, and have decided to buy Microsoft stock, it’s time to get introduced to the process of buying Microsoft share in the UK with eToro. In this part of our guide, we will get through all the steps from setting an account on this trading platform to buying shares online.
Open An Account
So, your first step is to set up a trading account on the eToro platform. For this purpose, visit the eToro homepage and click on the “Join Now” button to begin the process. On the sign-up window, you are required to fill in some information - set a username and password and fill in your email, then click on the “Create Account” button.
Set up an eToro account
The registration process is not done yet as you have to also verify your account. So, click on the button “Complete Profile”. Then, you will be transferred to another page where you could verify your identity. Here you must give some personal information, including your name, birthday, and gender. Also, you need to give a copy of your passport or driver’s license and a copy of your financial statement, including your utility bill.
When your account is verified and completed, the next step is about depositing funds into it to start trading. The minimal deposit you are required to fund to start trading on eToro is $200, which is around £144. The trading platform supports funding with the following payment methods:
- Debit Card/ Credit Card
- UK Bank Transfer
Buy Microsoft Shares
Now that you have set up an account, verified it, and deposited minimal funding, you are ready to buy Microsoft shares. For this purpose, type in the search toolbar “MSFT” and click on the first result. You will be immediately transferred to the Microsoft share page, where you will find plenty of useful information, including news, charts, research about the company and its stock.
Search for MSFT ticker
After navigating and examining it, and you are ready to buy shares - simply click on the “Trade” button, which will open a buying window where you can complete investing in Microsoft shares.
Start trading by clicking on the button Trade
Here you should enter the amount in USD you want to insert and start and finally click the button “Open Trade”. It is important to mention that if you are buying shares during the non-trading hours of the standard market, you will get a button “Set Order”. After clicking on it, your purchase will be automatically completed when the market opens.
How To Short Sell Microsoft Shares In The UK
Microsoft is one of the profitable and growing companies in the world, with stock shares that have seen tremendous growth in the last years. And it seems that they will keep growing sustainably, so short-selling the company’s shares is rather a risky thing to do. However, some financial analysts predict that there's a risk of another tech bubble that will soon burst. So, if you think that you can make a huge profit and don’t mind taking a risk, eToro gives you this opportunity.
eToro uses Contracts for Differences (CFDs) to do short selling with the leverage of 5:1. To make the short-selling contract, you should do the same steps described below up to opening the window for trading. Here you must select the button “Sell”, which is next to “Buy” in the same window. When all is done, click on “Open Trade”, and you will open a short sell position.
What Are The Risks Of Buying Microsoft Shares Right Now?
It’s a bit difficult to find reasons why you should not invest in the stock of one of the world’s giant tech companies. But if we dig a bit deeper, we can find out a few. One of those reasons can be considered the strong competition in the industries that Microsoft just made a step in. Windows and Office are the company's main products, but with its new CEO, the company risked to make its entrance into such innovative industries as clouding, AI, and gaming. There are other giant companies thriving in these areas, so there is a strong competition that will always suppress Microsoft to be more and more innovative in order to win in the long run.
The next reason that makes buying Microsoft stock a risky thing is its high PE ratio which is currently above 30 (at the time of writing 37.12). The problem is whether Microsoft can make enough profit to justify its high PE ratio. It’s easier for a $200 million company to double its earnings, but for a trillion-dollar company, it’s rather challenging.
And last but not least, several financial analysts predict another potential tech bubble that is about to burst. They consider the last boom in the US tech giants stocks a perfect bubble waiting to burst. Pascal Blanque, chief investment officer at asset manager Amundi, is so convinced in it that he told Reuters the thing is not about “if” but about “when” and urged the investors to adjust their stock portfolios accordingly.
In conclusion, Microsoft is one of the most tremendous and sustainably growing tech companies in the world with stable growth and profit development. Its clouding system and the entrance to the gaming industry and into the AI race promise that the company will be in high growth for a long time yet. It’s now the third biggest company in terms of market capitalization, being one of the members of the trillion-dollar club. Microsoft has seen tremendous growth from 2014 assuring several times that it’s highly flexible and can easily adapt to the market.
All these factors, plus being a large dividend stock - make Microsoft shares a fairly good investment from the perspective of long-term investors. So, take a look at the Microsoft share price history to make a final decision and if you want to buy Microsoft shares in the UK, go on with eToro to set up an account and start trading.
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What is the highest Microsoft stock has ever been?
The all-time high Microsoft stock closing price was $244.99 on February 12, 2021.
Is Microsoft Part of FAANG?
Though Microsoft is the second-largest US company in terms of market capitalization, it’s not part of FAANG. FAANG members are only Facebook, Apple, Amazon, Alphabet (former Google), and Netflix.
Is Microsoft stock overvalued?
Microsoft is one of the leading tech companies in the world, and it has the most innovative and advanced technology in the world. The company also shows flexibility in the process of adapting to the rapidly changing world. It is also one of those few companies that pay dividends to their stockholders, and it annually raises its dividends. Considering all these factors, we cannot say that Microsoft shares are overvalued today. From another point, however, the company has had a PE ratio of over 30 in the last months, which is a bit high for a $1.8 trillion company.
What is the Microsoft PE ratio?
Microsoft PE ratio at the time of writing is equal to 37.12.