Microsoft stock has performed extremely well through COVID. Since a trough in March of ~$135.00, shares have resumed their upward trajectory and currently trade above $210.00.

In a world of remote everything, Microsoft’s products have become critical to their customers and the CEO recently mentioned that they have seen 2 years of digital transformation in 2 months! Microsoft’s cloud offering (Azure), Productivity software (Teams +) and video gaming (Xbox) have all been beneficiaries.

The company’s CEO, Satya Nadella, has done a tremendous job since his appointment in 2014 and the stock price is up 400%+ in 6 years! He has led the company’s growth in cloud as well as its transition towards a subscription model for much of its software.

With over $125B in revenue, maintaining double digit growth rates is impressive for a business of this size. With a strong balance sheet (net cash) and significant free cash flow ($40B+), the shares are not cheap and currently trade at ~36x earnings or 2.9% FCF yield. The company also offers a 1% dividend yield for all of the dividend investors our there!

Microsoft is a secular growth story currently firing on all cylinders, but that does not mean there are no risks to the story. This video looks at shares of Microsoft and outlines key considerations for investors.