Long-term investments are not always exciting. Also, buying a stock and letting him stay there for 30 years (or more) shouldn’t be a big deal. People like to feel smart or at least inspired. Long-term investing, therefore, requires a certain amount of discipline to understand the thoughts it contains and to feel the ultimate excitement it creates.
When you have the patience to take a stake in a great company and wait for it to succeed before anyone else finds out about it, you are lucky enough to be part of what that company is doing. Discover that you could own a department and reap huge profits from the hard work they put in as much as they do.
in the case of Amazon (AMZN -0.21%) When microsoft (MSFT -0.49%)following such a strategy would have led to astronomical returns for early investors who remained patient. is worth a life-changing amount today.
The journey to get there may seem tedious, but the results are certainly exciting. Let’s take a closer look at these two tech giants and see how investors made their money.
1. Amazon: From books to world domination
The Amazon was born from humble beginnings. Founder Jeff Bezos wanted to revolutionize retail by proving that books could be sold online. Not only was he and his company successful, they are now the world’s largest e-commerce company offering millions of products, but that’s not the only industry it helped pioneer.
In 2006, Amazon built extensive IT infrastructure services to support e-commerce initiatives and began offering excess capacity to other companies, becoming one of the first commercial providers of large-scale cloud computing. became. To date, Amazon Web Services is the world’s largest cloud services provider, delivering hundreds of solutions and generating $76 billion in revenue in the last 12 months.
We continue to expand aggressively in true Amazon style. The company’s digital advertising business is booming, monetizing his flagship website, Amazon.com. Amazon.com generates 2.6 billion hits per month. And as Amazon delves deeper into streaming through its Prime platform, opportunities for Amazon to sell ad spots on its e-commerce websites will continue to grow. Includes hot properties like the NFL’s Thursday Night Football.
Amazon stock went public on May 15, 1997 at $18 per share, so if you invested $500 then (about $928 in today’s dollars), you bought about 27 shares. Adjusting for his four stock splits in the company, on a split-adjusted cost basis he’s about $0.075 per share, giving him 6,480 shares today.
At Amazon’s current stock price of $84.18, your initial $500 outlay is worth a whopping $545,486 today. Still, despite this growth, Amazon’s dominant market position in e-commerce and cloud computing, key industries of the future, still makes it a worthwhile buy today for continued long-term growth. means
2. Microsoft: A trillion-dollar story with billions of customers
Microsoft has a long history of being one of the world’s most valuable public companies. Currently, its value has reached about $1.8 trillion. The main reason is that the decades-old Windows and Office 365 software products are still used by billions of people around the world. And like Amazon, Microsoft isn’t afraid to enter new territories and expand its offerings.
Microsoft Azure is the company’s flagship enterprise cloud services platform and number two in the industry, behind Amazon Web Services. It is also the fastest growing area of Microsoft’s overall business.
The company is also building a strong hardware segment. Its Xbox gaming ecosystem is globally recognized, and the Surface line of notebook computers and devices has become his billion-dollar brand in its own right.
Speaking of games, Microsoft is working to close a $68.7 billion deal to acquire video game studios. activision blizzard Production of popular titles such as call of duty When world of warcraftSome government regulators are working to block the deal, citing concerns that it would give Microsoft too much power over the industry. This battle could drag on for a while, but this potential acquisition is further proof that Microsoft wants to expand.
Microsoft’s IPO date is March 13, 1986, and it trades at $21 per share. At the time, $500 (about $1,360 in today’s dollars) could have bought just over 23 shares. Adjusting for his nine stock splits in the company, there are now 6,624 shares, and the split-adjusted cost basis is $0.0729 per share.
Given that Microsoft’s current stock price is $239.73, that initial $500 investment would balloon to $1.59 million. Microsoft has been paying dividends since his 2003, so it has collected a payout of $167,123 in the process. These 6,624 shares would yield an annual dividend of $18,017, based on Microsoft’s current quarterly dividend of $0.68 per share.
Stocks that can help you earn millions
Just $1,000 invested between Amazon and Microsoft’s IPOs would have returned over $2 million to long-term holders. You now own part of two of the world’s most diverse and successful technology companies, and may continue to deliver positive returns well into the future. If you don’t own stock in either company yet, it’s never too late.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in any of the mentioned stocks. The Motley Fool has positions in and recommends Activision Blizzard, Amazon.com and Microsoft. The Motley Fool’s U.S. headquarters has a disclosure policy.