How Much You’d Have Now If You Invested Your Tax Refund in Microsoft in 2023
Written by
Chris Ozarowski
Edited by
Chris Cluff
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Microsoft has had a great year, with a gain of nearly 50% in its stock price since April 2023. If you had invested your 2023 tax refund into Microsoft’s stock last year, you would have made a hefty profit.
Keeping that in mind, would investing this year’s tax refund into Microsoft be a good idea?
How Much Did Microsoft Grow in the Past Year?
On April 5, 2023, Microsoft’s stock closed at $284.34. One year later, the stock is now worth $425.52 per share — a 49.65% increase in just 12 months. This means that $10,000 invested in Microsoft last April would be worth $14,965 today.
What was the reason for this huge growth? Microsoft is part of the so-called “Magnificent Seven,” a group of top tech stocks that have driven most of the stock market’s growth in recent months. Much of the growth has been attributed to investors’ interest in the potential of artificial intelligence, something Microsoft capitalized on through its investment in OpenAI and integration of its chatbots into Office and Bing.
In a January statement, Microsoft CEO Satya Nadella reaffirmed the company’s dedication to AI investments: “We’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”
But it’s not just AI hype that drove the stock’s growth. Microsoft’s revenue increased 18% in 2023, and sales of Azure, Microsoft’s cloud computing service, rose 30%.
So how much could the average American have made investing a tax refund into Microsoft’s stock in April 2023?
What Was the Average Tax Refund in 2023?
According to the IRS, the average 2023 tax refund in the U.S. was $3,028 in 2023. If you had invested that $3,028 into Microsoft’s stock on April 5, 2023, and then sold it on April 5, 2024, you would have $4,531 right now. That’s a profit of $1,503 in just 12 months — not bad.
Average 2024 Tax Refund
This year, the IRS says the average refund is 4.1% higher than in 2023, at $3,182. The average tax refund for those who chose direct deposit as their refund method is $3,244.
Should You Invest Your 2024 Tax Refund in Microsoft Stock?
It’s usually better not to invest all of your money into a single stock or asset. Doing so exposes you to risk as the success or failure of your entire investment is dependent on the performance of a single asset, which could plummet due to unforeseen circumstances.
However, if you already have a diversified portfolio and your tax refund is just another small part of your investment strategy, then you may be able to invest it in a single stock without too much worry.
In that case, is Microsoft’s stock a good investment in 2024? It’s always hard to say for sure, but analysts seem optimistic. The cloud computing market is projected to grow; and, if Microsoft continues to capture that market with Azure, it’s likely to grow as well.
Earnings estimates for 2024 are projected to be higher than in the previous year, so if Microsoft continues to deliver, the stock could be a good investment.
How Do You Know Whether You Will Get a Tax Refund?
If you’ve paid more taxes than you owe, you’ll get a refund. You can calculate this on the IRS website by checking your pay stubs for the total amount you have had withheld and comparing that to your tax liability.
How Long Will It Take To Get Your Tax Refund in 2024?
If you file electronically and choose direct deposit, the IRS typically issues refunds within 21 days of receiving your tax return. However, if you file a paper return, the process can take longer — usually six to eight weeks.
This timeline can be affected by other factors, such as filing during peak periods, needing to review or correct your return or facing processing delays due to staffing issues at the IRS. As of March, the agency had issued about 14% fewer refunds than at the same time in 2023.
To ensure the quickest possible refund, file early, opt for electronic filing and use direct deposit.
Final Take
Microsoft’s stock has had a meteoric rise over the past year, and investing your tax refund in it last year would have netted you a profit of almost 50%. However, past growth does not indicate future performance, and there are no guarantees that the stock will continue to grow in value.
If you want to invest your tax refund, it might be better to put it in an index fund. Make sure to talk to a financial advisor before making any serious financial decisions.
More From GOBankingRates
