Microsoft’s valuation has increased 10x in the past 10 years under Satya Nadella

The big picture: Microsoft’s market value has gone up more than 10 times since Satya Nadella took charge of the company in 2014, replacing its former CEO, Steve Ballmer. During that same time, the broader S&P 500 only grew 185 percent, making Microsoft one of the best-performing large-cap stocks in the country over the past decade.

As of February 2024, Microsoft has a $3.06 trillion market cap, making it the largest publicly-traded American company, ahead of rivals like Apple, Google, and Meta. When Nadella took over as CEO in February 2014, the company was valued at just over $300 billion, having tumbled 30 percent during the 14 years that Ballmer led the firm.

Under Nadella, Microsoft not only managed to retain its leadership position in personal computing and office productivity software, but also emerged as one of the leaders in two of the most important sectors in tech circa 2024 – cloud computing and artificial intelligence.

In comparison, Ballmer’s reign saw the company falter in two critical sectors: search and mobile. While Microsoft’s Bing is a distant second to Alphabet’s Google in the former category, the latter has an entrenched duopoly with Apple and Android combining for virtually 100 percent of the market. Microsoft was forced to discontinue its Windows Phone platform after multiple missteps during the Ballmer era prevented the company from becoming a force to be reckoned with in the mobile space.

Nadella has also steered Microsoft away from the proprietary, closed-source mindset that typified the company in the first few decades of its existence. Under him, Microsoft started contributing to open-source projects and released software under open-source licenses. In a surprise move, the company even released its in-house apps on Linux, starting with the communication software, Teams.

Microsoft also made some big-ticket acquisitions under Nadella. In 2016, the company acquired professional social media site LinkedIn for $26.2 billion, and followed that up by buying code hosting platform GitHub for $7.5 billion in 2018. However, Microsoft’s most talked-about deal was the purchase of game publisher Activision Blizzard for a whopping $75 billion in 2022. Microsoft’s other notable purchases during the Nadella era include Minecraft parent Mojang, and Nuance Communications.

Given the increasing relevance of AI in modern tech, one of Nadella’s masterstrokes has to be the investment in OpenAI, the company behind the generative AI chatbot ChatGPT and AI image generator Dall-E. While the relationship between the two companies have sometimes been tense, both have benefited massively from the partnership.

Meanwhile, despite a successful first decade as Microsoft CEO, Nadella faces multiple challenges going forward. As noted by CNBC, the company is still struggling to monetize its hardware products, having faced one failure after another in this department, including the much-hyped HoloLens augmented reality headset. The company’s Copilot AI software has also failed to capture the imagination of the public so far.