By Stephen Wright
Publication Date: 2026-02-09 10:44:00
Image source: Getty Images
A £10,000 investment in Microsoft (NASDAQ:MSFT) shares from February 2016 is now worth £72,815. That’s an outstanding result and it doesn’t even include the dividends.
Ten years ago, the stock was trading at an unusual discount because the company was in the early stages of a major technological transition. Sound familiar?
Cloud
Back in 2016, Microsoft shares were trading at some unusually low valuation multiples. The stock reached a price-to-earnings (P/E) ratio of 18 and a price-to-book (P/B) ratio of 5.
The reason is that the company was going through a major shift in the way it operated. It was shifting from selling physical copies of software (on discs) to cloud-based subscription services.
Moving from permanent licenses to monthly subscriptions resulted in a drop in sales. And building out the associated data centre infrastructure compressed margins in the short term.
On reflection, though, the chance…
