With the world's third-largest market cap of $1.89 trillion, Microsoft (MSFT 0.22%) is a behemoth in the tech world and likely has a long, lucrative future ahead.

In 2022, its stock fell 28.7% as macroeconomic headwinds burdened the entire tech industry. However, the market has shown signs of recovery since the start of the year, with the Nasdaq Composite index up 10% year to date and Microsoft's stock up roughly 6% in the same period. Meanwhile, inflation has eased for seven months in a row, hitting a high of 9.1% in June 2022 and slowing to 6.4% this past January. The improvement will likely attract investors to tech stocks, boosting companies like Microsoft.

With that said, it's possible that a bull market is coming. Here are two key reasons to invest in Microsoft's stock.

1. Microsoft is a software king

As the home to massive brands such as Windows, Office, Xbox, and Azure, Microsoft has climbed to the top of the tech industry as a leader in software. The company has substantial market shares in operating systems, productivity software, video games, and cloud computing, mainly thanks to the mass adoption of its digital offerings by businesses and consumers. Meanwhile, Microsoft has maximized its earnings by providing access to a large portion of its software through subscriptions.

Microsoft has used software to expand and succeed in multiple industries. Its cloud computing platform Azure has more recently been under the spotlight, reporting a revenue rise of 31% year over year in the second quarter of 2023 (ending December 2022). However, Microsoft has cleverly used software to climb to the top of an industry best known for its hardware: console video gaming.

Microsoft debuted its Xbox brand in November 2001 with the release of a new console, entering a highly competitive market where Japanese companies Nintendo and Sony reigned supreme. As a result, Microsoft stumbled for several years, nearly throwing in the towel and abandoning the brand. However, the launch of its subscription-based video game platform, Xbox Game Pass, in June 2017 changed the game.

The service was one of the first to offer a large library of games, in a similar style to Netflix, for a low monthly fee. Xbox Game Pass vastly increased the value of the company's console, making it more competitive against Sony's PlayStation. From 2020 to 2022, Game Pass subscriptions increased from 10 million to 25 million, a rise of 150%.

Meanwhile, Microsoft is now the fourth-biggest game company by revenue after Tencent, Sony, and Apple. However, it could become the third largest if its attempts to acquire game developer Activision Blizzard later this year are successful.

2. A history of consistency and reliability

In 2022, economic declines sent the Nasdaq Composite index plunging 33% throughout the year. While the sell-off burdened Microsoft's stock, it fared better than most of the market and many of its peers, as seen in the chart below.

MSFT Chart

Data by YCharts

Microsoft's more moderate decline during an economically challenging year proved its resilience and the strength of its business.

Over the last five years, Microsoft's stock has risen 169%, and it's increased by 806% over the last decade. The stellar growth has come alongside revenue that has climbed 80% to $198.27 billion since 2018, with operating income soaring 138% to $83.38 billion. The company's consistent stock and financial growth over the years have made it one of the most reliable long-term tech investments out there.

Moreover, Microsoft's forward price-to-earnings ratio of 27 has decreased 8% over the last year, increasing its value and presenting a buying opportunity. With its stock still down 8% year over year, now is an excellent time to invest in Microsoft stock before the bull market hits.