Microsoft's market value has increased more than 10 times since Satya Nadella took over from former CEO Steve Ballmer in 2014. During the same period, the S&P 500 rose only 185%, making Microsoft one of the best-performing large-cap stocks in the United States over the past decade.
As of February 2024, Microsoft has a market value of US$3.06 trillion and is the largest listed company in the United States, surpassing competitors such as Apple, Google and Meta. When Nadella took over as CEO in February 2014, the company was valued at just over $300 billion. During the 14 years Ballmer led Microsoft, the company's market value fell by 30%.
Under Nadella's leadership, Microsoft has not only managed to retain its leadership position in personal computing and office productivity software, but has also become one of the leaders in two of the most important areas in technology around 2024 - cloud computing and artificial intelligence.
By contrast, the company underperformed in two key areas, search and mobile, during Ballmer's tenure. In the former field, Microsoft's Bing is far ahead of Alphabet's Google, while in the latter field, Apple and Android hold almost 100% of the market share, forming an entrenched duopoly. Due to multiple missteps during the Ballmer era, Microsoft was forced to kill off its Windows Phone platform, preventing the company from becoming a force to be reckoned with in the mobile space.
Nadella also steered Microsoft away from the proprietary, closed-source mindset that characterized its first decades. Under his leadership, Microsoft began contributing to open source projects and releasing software under open source licenses. The company even made a surprise announcement of its apps on Linux, starting with communications software Teams.
Under Nadella, Microsoft has also made some big acquisitions. In 2016, the company acquired professional networking site LinkedIn for $26.2 billion, and then acquired code hosting platform GitHub for $7.5 billion in 2018. However, Microsoft's most eye-catching transaction is its acquisition of game publisher Activision Blizzard in 2022 for a high price of US$75 billion. Microsoft's other notable acquisitions during the Nadella era include Minecraft parent company Mojang and Nuance Communications.
Given the growing importance of artificial intelligence in modern technology, one of Nadella's best tricks was to invest in OpenAI, the company behind the artificial intelligence chatbot ChatGPT and the artificial intelligence image generator Dall-E. While the relationship between the two companies has been tense at times, both parties have benefited greatly from the collaboration.
Meanwhile, despite Nadella's success in his first decade as Microsoft CEO, he faces multiple challenges going forward. As CNBC points out, the company is still struggling to monetize its hardware products, facing failure after failure on that front, including its much-talked-about HoloLens augmented reality headset. The company's Copilot artificial intelligence software has so far failed to capture the public's imagination.