Microsoft is making artificial intelligence one of its top priorities.
During its fiscal third-quarter earnings call, CEO Satya Nadella explained that "investing in the new AI wave" would remain a key focus for the software giant.
Microsoft announced in January a multibillion-dollar investment in OpenAI, the artificial intelligence lab that created ChatGPT. Since then, Microsoft has begun to incorporate AI technology, dubbed "Copilot," into some of its well-known products including Word, PowerPoint and Excel.
The company expects AI will help drive revenue growth over time because it will improve its product offerings.
Fiscal third-quarter revenue grew 7% to $52.86 billion, beating analysts' prediction of $51.02 billion, according to Refinitiv consensus estimates. Additionally, Microsoft reported earnings per share of $2.45, which surpassed the $2.23 analysts expected.
What this means for investors
Microsoft announced its fiscal third-quarter earnings report after the bell on Tuesday, April 25. The next day, the company's share price increased by nearly 8% and ended the trading session at $295.37 per share. The momentum continued on Thursday, with Microsoft shares setting a 52-week high.
Here's how much money you'd have as of April 26 if you had invested $1,000 into the company one, five and 10 years ago.
If you had invested $1,000 into Microsoft a year ago, your investment would be worth about $1,103 as of April 26, according to CNBC's calculations.
If you had invested $1,000 into Microsoft five years ago, your investment would have more than tripled to $3,248 as of April 26, according to CNBC's calculations.
And if you had put $1,000 into Microsoft a decade ago, it would have soared to $9,841 as of April 26, according to CNBC's calculations.
When it comes to investing, research is key
Although a stock may perform well in the short-term, that doesn't necessarily mean it will continue to do so over the long-term. It's important to remember that the stock market can be fickle, and there's no foolproof way to predict how it may behave in the future.
For most investors, a passive investment strategy tends to make more sense than hand-picking individual stocks. Passive funds, such as index funds or exchange-traded funds, don't use managers to directly run the fund, so they tend to be cheaper than more actively managed funds.
Additionally, passive funds are generally less risky since they invest in a wide array of companies. This lessens the chance that a decline in a particular company's stock price would bring down your portfolio's overall performance.
To get started, many experts recommend investing in low cost index funds that track market indices, such as the S&P 500. The S&P 500 index tracks the stock performance of around 500 large, publicly listed American companies, so investing in it adds automatic diversity to your portfolio.
As of April 26, the S&P 500 declined nearly 3% compared with its level 12 months ago, according to CNBC's calculations. On the other hand, the value of the market index has grown by about 52% since 2018 and increased by about 156% since 2013.
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