Will there be a Microsoft Stock Split in 2024?
In the past, Microsoft split shares every time the stock price crossed $100 except in 2003. Microsoft’s stock price is close to $400 now.
In its Q1 FY24 earnings release, Microsoft reported a revenue of $56.5 billion, a 13% increase year-over-year. Operating income and net income rose 25% and 27% to $26.9 billion and $22.3 billion, respectively. Diluted earnings per share stood at $2.99, up 27%. The company’s cloud business was a major contributor, with revenue of $31.8 billion, a 24% increase. Microsoft returned $9.1 billion to shareholders through share repurchases and dividends.
Microsoft Stock Split: Microsoft stock has surged 60% in the last 12 months and was briefly the company with the highest market cap on Friday, Jan 13th. The stock price is close to its all-time high, so the question is, Will Microsoft Split again?
Latest Microsoft Stock Price
| Metric | Value | Trend |
|---|---|---|
| Current Price | $410.00 | Steady |
| Trading Volume | $6.7 M | Steady |
Microsoft Stock Split: Latest Earnings
Microsoft’s first-quarter FY24 [July to September 2023] showcased robust financial growth:
- Revenue surged to $56.5 billion, marking a 13% increase.
- Operating income reached $26.9 billion, up by an impressive 25%.
- Net income soared to $22.3 billion, reflecting a remarkable 27% rise.
- Diluted earnings per share climbed to $2.99, also up by 27%.
Key highlights by segment:
- Productivity and Business Processes: Office commercial products and cloud services revenue rose by 15%. Dynamics products and cloud services revenue saw a substantial 22% increase. LinkedIn revenue grew by 8%, while Office consumer products and cloud services rose by 3%.
- Intelligent Cloud: Azure and other cloud services revenue surged by 29%. Server products and cloud services revenue experienced a robust 21% increase.
- More Personal Computing: Despite a 22% dip in device revenue, Windows revenue increased by 5%. Xbox content and services revenue rose by 13%, while search and news advertising revenue grew by 10%.
Additionally, Microsoft allocated $9.1 billion to shareholders through share repurchases and dividends during this quarter.
History of Microsoft Stock Split
Microsoft was founded in 1975 by Bill Gates and Paul Alien. It began its trading on the Nasdaq on 13th March 1986 under the ticker symbol MSFT and set its IPO price at $21 per share.
Since then it has been a memorable journey for the stock and it had nine stock splits in all these years, these splits are mainly concentrated in the era 1987 to 2000, and its last split was in the year 2003.
But as a matter of fact, if anybody had invested at the time of IPO, buying even one share, he/she would have 288 shares as of today. Here is the summary of the Microsoft stock split tabulated below:
| Payable Date | Split Ratio | Price Before Split | Price After Split |
| Sept 18, 1987 | 2:1 | April 12, 1990 | $53.5 (Sep 21) |
| April 12,1990 | 2:1 | $120.8 (Apr 12) | $60.8 (Apr 16) |
| June 26,1991 | 3:2 | $100.8 (Jun 26) | $68.0 (Jun 27) |
| June 26, 1991 | 3:2 | $112.5 ( Jun12) | $75.8 (June 15) |
| June 12, 1992 | 2:1 | $97.8 (May 20) | $50.6 (May 23) |
| May 20, 1994 | 2:1 | $152.9 (Dec 6) | $81.8 (Dec 9) |
| December 6, 1996 | 2:1 | $155.1 (Feb 20) | $81.6 (Feb 23) |
| March 26, 1999 | 2:1 | $178.1 (Mar 26) | $92.4 (Mar 29) |
| Feb 14, 2003 | 2:1 | $48.3 (Feb 14) | $25.0 (Feb 19th) |
*Source: Microsoft Investor Relations
Microsoft has undergone both 2-for-1 and 3 for 2 stock splits. A 2-for-1 stock split means that one additional share is given for every share held. In a 3 for 2 stock split, an additional share is given for every two numbers of shares held.
Microsoft Stock Forecast
With the Stock performance up 62% in the last 12 months, the motivation to split the stock is relatively lower.
One of the other factors delaying the Microsoft stock split could also be to maintain influence in the Dow Jones Industrials. The Dow Jones is a price-weighted index and Microsoft has the second-highest weight. For example, a 1:2 split would lead to Microsoft losing nearly half of its weight. A 1:3 split would lead to Microsoft losing 66% of its weight in the DJIA.
Given these conditions, it is unlikely Microsoft will split its stock this month.
Microsoft Split 2024: No Split in the Last 20 Years
The last Microsoft stock split announcement was on January 16th, 2003, trading began with the new price on February 16th, 2003. Since then, there has been no announcement regarding the same. It has been almost 20 years since the last split. One more thing that stands out is that Microsoft aggressively announced splits in the first decade, especially from 1990 to 1999 and they had seven splits in these years. But, as the dot com bubble hit the market, Microsoft Inc. shares also slumped in the period from 2000 to 2002.
Another thing noticeable in the history of the Microsoft stock split is that all the splits were initiated after the share price crossed $100. But the split of 2003 was different, neither share price crossed $100 nor did it seem that it would cross that mark soon. Yet Microsoft Inc. announced a 2:1 share split at just a share price of $48.
Also, the 2003 share split was a memorable moment for the shareholders for another reason. It was the first time that Microsoft Inc. declared a regular dividend. Declaring a dividend at any board meeting shows the confidence and faith of management for the long-term growth of the company. Microsoft believed that the step of a share split even at $48 and simultaneous declaration of the dividend was a strategic move to attract a broader range of investors in the market.
Read: Tesla Stock Split
Also read: Amazon Stock Split
MSFT Stock Split 2024: The Share Splits Were Successful
Microsoft stock split history also provides another very interesting input. Any share split is meant to provide a short-term push to the stock and in the case of Microsoft Inc, most share splits were successful in doing so. The only exception was the 1987 split when the share price on the following day was less than the proportional decrease in the share price due to the split. Specifically, the closing price was $114.50 on 18th September 1987, which should have opened at $57.25 on the following day, but it opened at $53.50.
Otherwise, all the other splits were successful and it implied gain post-split. The largest gain was from the 1996 split when the 2:1 stock split implied a $76.39 price on the following day, but it was $81.75, implying a 7% gain just due to the split. It is a known fact that splits do not have any theoretical impact on the balance sheet or the market capitalization of the company but the 1996 split showed that shareholders do give a lot of importance to splits before making investments.
Microsoft Stock Price Prediction for the Next 5 Years (Aggregated)
- Microsoft Stock Price Prediction 2024 is $450
- Microsoft Stock Price Prediction 2025 is $508
- Microsoft Stock Price Prediction 2026 is $566
- Microsoft Stock Price Prediction 2027 is $614
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Note: collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.