There are few companies as renowned as Microsoft (MSFT 1.88%). That's what helped it achieve a market cap of over $3.5 trillion and sit as the world's most valuable public company (as of June 19).
Despite Microsoft's decades of success, the future remains bright, and there is still plenty of room for growth. If you're considering buying Microsoft shares, here are 10 reasons to do so -- and never sell.
1. Microsoft has a diversified business
Microsoft has its hands in seemingly every corner of the tech world. From productivity software to cloud computing to hardware to social media to gaming, Microsoft has no shortage of revenue streams. This helps ensure Microsoft doesn't rely too heavily on one segment and helps it weather market cycles that affect specific businesses or industries.
2. Its revenue and profit are growing impressively for its size
In the third quarter of its fiscal 2025 (ended March 31), Microsoft made around $70 billion in revenue and had a net income of $25.8 billion. Considering Microsoft's size, the growth of both of these over the past decade has been impressive.
MSFT Revenue (Quarterly) data by YCharts
3. Microsoft has a lot of corporate clients
Having a large corporate client base helps provide reliable and recurring revenue because they often have longer-term contracts. In many cases, it's not easy for corporations to switch from Microsoft because they rely too much on it for their daily operations. This helps with Microsoft's customer retention.
4. Microsoft has steadily increased its dividend
Microsoft might not get the dividend stock label, but it has been paying one for 22 years. And even better: It has increased the annual payout for 20 consecutive years. If you're holding this stock forever, you can bet on this trend continuing. I fully expect Microsoft to eventually become a Dividend King.
5. Microsoft's strategic partnership with OpenAI
Microsoft has a partnership with OpenAI that makes its cloud platform, Azure, the exclusive cloud provider for its artificial intelligence (AI) models. In return, Microsoft gets special access to OpenAI's AI technology, allowing it to integrate it into its large suite of products.
6. Microsoft Azure continues to be a high-growth business
Microsoft Azure is the world's second-largest cloud service platform, trailing Amazon Web Services (AWS). As of the end of 2024, Azure's market share was 21%. Although this is a ways behind AWS (30%), it's good progress from just a few years ago. In the past quarter, Microsoft's "Azure and other cloud services" revenue grew 33% year over year, making it the company's fastest-growing segment.
7. Spending to ensure growth and competitiveness has never been an issue
Microsoft has routinely spent billions each year on capital expenditures (investments made for growth), but it has stepped that up noticeably over the past few years. With developments like AI and cloud services, it's encouraging to see Microsoft willing to invest the necessary money to remain competitive in these areas.
MSFT Capital Expenditures (Quarterly) data by YCharts
8. The cash continues to flow in
Revenue is great -- and certainly needed -- but free cash flow is also important because that money is used to pay dividends, buy back shares, pay down debt, and spend on research and development. Microsoft's free cash flow in its latest fiscal year was more than the revenue of many S&P 500 companies.
MSFT Free Cash Flow (Annual) data by YCharts
9. Microsoft has shown it can survive through terrible economic times
Microsoft has been around since 1975, and during that time, it has experienced some of America's most challenging economic periods. It has survived Black Monday (1987), the dot-com crash that took out many tech companies, the 2008 financial crisis, and the COVID-19 pandemic.
Microsoft's stock was definitely affected during each of those instances, but it has bounced back and provided great long-term returns. If you plan to hold a stock forever, it should be a company that is built to weather whatever economic storm comes its way.
10. Satya Nadella has shown he's one of the best leaders in the industry
Satya Nadella took over as Microsoft's CEO in 2014, and Microsoft has been full steam ahead ever since -- growing from a $300 billion company to a $2.5 trillion company.
Nadella won't always be Microsoft's CEO (although he's only a modest 57 years old), but he's leading the company in the right direction now, and I trust he'll leave it in great condition for whomever comes after him down the road.
