If you invested $10,000 in Microsoft stock when Satya Nadella became CEO, this is how much you would have today.

microsoft (MSFT -1.27%) It has become one of the most profound success stories in stock market history. Since its IPO in March 1986, its stock price has risen nearly 4,500 times.

That growth wouldn’t have happened if the company hadn’t redefined itself over time. When Satya Nadella took over as CEO in 2014, the rise of smartphones and competition had weakened the company’s Windows-centric dominance. apologize On the PC side. So Nadella redefined Microsoft as a cloud company, ushering in a new era of prosperity and making it the company with the highest market capitalization on Wall Street.

Here’s how the company got there and where it can go from here.

Microsoft’s growth during the Satya Nadella era

Nadella took the helm of Microsoft on February 4, 2014. During his tenure, the stock price has risen dramatically, with a current market value exceeding $3.1 trillion. This toppled Apple, which had long been the leader in this field. The move has rewarded shareholders handsomely, and the $10,000 invested on Nadella’s first day as CEO will now be worth about $114,000.

MSFT data from YCharts.

Microsoft before Nadella

Nadella joined Microsoft in 1992 and most recently served as vice president of the Cloud and Enterprise Group. In that role, he led the company toward cloud infrastructure and services.

He became CEO, succeeding Steve Ballmer, a close associate of co-founder Bill Gates and longtime CEO. Microsoft stagnated under Ballmer’s leadership. The launch of smartphones during that period completely caught the company off guard.

As a result, the $10,000 Ballmer invested when he became CEO in 2000 was worth just over $6,700 when he stepped down in 2014, leaving many investors pessimistic about the company.

Nadella’s approach

Under Nadella, the paradigm has shifted in a positive direction. He redefined Microsoft’s core business around the Azure cloud platform. He achieved tremendous success, and eventually Azure became the second most popular cloud platform. Amazon Web services that pioneered this industry.

Image source: Statista.

A ranking in the cloud means the company plays a significant role in supporting AI. Thanks to a partnership with OpenAI and improvements to ChatGPT, Microsoft’s Bing search engine poses a real challenge for the first time in decades. alphabetGoogle search for has dominated the field for a long time.

Contrast this with Apple, which hasn’t released a game-changing product in years and hasn’t made a mark in the cloud or AI space despite its vast resources. Nadella took advantage of this situation to help Microsoft become one of the “Fab Four” companies, emerging as the largest and most important tech giant.

Amid this success, the stock price rose nearly 50% last year alone. However, the price-to-earnings ratio (P/E) is 37, which is close to the highest level in five years. This won’t necessarily derail the long-term growth story, but it could dampen interest in the stock in the short term.

Where does Microsoft go from here?

Despite the valuation, investor returns under Nadella’s leadership are likely far from over. Thanks to his guidance, Microsoft again became a leader among the largest technology stocks.

As the company leverages its cloud competitiveness and OpenAI partnership, long-term growth should continue, even if the stock price is slightly ahead of fundamentals. So those who are invested in Nadella’s leadership should probably continue to hold on, and may even consider adding shares if the stock falls during a bear market.