Recently, the Gates Foundation disclosed it sold its final 7.7 million shares of Microsoft (NASDAQ: MSFT), a position worth approximately $3.2 billion. A sale of that size raises eyebrows and perhaps causes a bit of nervous chatter among investors. Why would Bill Gates, the founder of Microsoft, have his foundation sell every last share? Is it time to panic?
Turns out, the answer is a definitive no.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
The reason for the sale isn’t a bearish outlook on Microsoft; instead, it’s a philanthropic pledge. The foundation is committed to spending all of its endowment by 2045 and, to do so, must liquidate its positions and spend them down accordingly. The foundation is planning to spend more than $200 billion over two decades.
This is an important matter of fact for the company’s investors. The software giant, which recently celebrated its 50th birthday, still has an incredible business with a strong competitive moat. In its most recent quarterly report, Microsoft saw revenue increase 18% to $82.9 billion. Its diluted earnings per share and net income both grew even faster at 23%.
Microsoft stock is down about 13% year to date as of this writing, but the company is still worth buying and holding for the long term. If anything, this has made Microsoft’s valuation metrics far more appealing, and now may be a good time to start a position.
Should you buy stock in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $481,589!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,345,714!*
Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
