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

microsoft (MSFT -1.27%) has been one of the most profound success stories in stock market history. Since its initial public offering in March 1986, the stock price has increased nearly 4,500 times.

This growth would not have been possible if the company hadn’t taken the time to redefine itself. When Satyanadera took over as CEO in 2014, Windows-led dominance was waning amid the rise of smartphones and competition from other companies. apple On the PC side. There, Mr. Nadella redefined Microsoft as a cloud company, ushering in a new era of prosperity and making it the most valuable company on Wall Street.

Here’s how the company got there and where it’s headed next.

Microsoft’s growth under Satya Nadella

Mr. Nadella took the helm of Microsoft on February 4, 2014. The stock price has risen dramatically during his tenure, and its market capitalization now exceeds $3.1 trillion. This dethroned Apple, the long-time leader in this regard. The move is a significant boon for shareholders, with the $10,000 investment made on Nadella’s first day as CEO now worth about $114,000.

MSFT data by YCharts.

Microsoft before Nadella

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

When he became CEO, he took over from longtime CEO Steve Ballmer, a confidant of co-founder Bill Gates. Microsoft stagnated under Ballmer’s leadership. Meanwhile, the release of the smartphone completely caught the company off guard.

As a result, a $10,000 investment made when Ballmer became CEO in 2000 was worth just over $6,700 by the time Ballmer stepped down as CEO in 2014, with many investors This means that you have a pessimistic view of the situation.

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 was very successful and eventually Azure became his second most popular cloud platform. Amazon Web services pioneered this industry.

Image source: Statista.

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

This is in contrast to Apple, which hasn’t released any innovative products in years and has kept a low profile in the cloud and AI space despite having vast resources. Mr. Nadella took advantage of this situation, allowing Microsoft to become one of the “Fab Four” companies and emerge as the largest and perhaps most important technology giant.

Its success has seen its stock price rise about 50% in the last year alone. However, this puts the company’s price-to-earnings ratio at 37 times, near a five-year high. That won’t necessarily derail the long-term growth story, but it could dampen interest in the stock in the short term.

Future direction for Microsoft

Despite the valuation, the returns to investors under Nadella’s leadership are likely not over yet. Thanks to his guidance, Microsoft has once again become a top company among the largest tech stocks.

The company leverages its cloud competitiveness and partnership with OpenAI, so long-term growth should continue even if the stock price is slightly above fundamentals. So those who invested in Mr. Nadella’s leadership should probably hold on to the stock, and may consider adding to the stock if it suffers a bear market decline.