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Microsoft is trailing the S&P 500 in 2026 so far, after lagging in both 2024 and 2025. If that gap holds through year-end, it would be the third consecutive calendar year of underperformance—but the latest comparison is provisional, not a completed annual result. The two earlier three-year streaks identified since Microsoft went public in 1986 were followed by different outcomes, so history offers context, not a dependable rebound forecast.
How far behind is Microsoft in 2026?
A dividend-reinvested comparison of Microsoft (MSFT) with SPY, an exchange-traded fund used as a proxy for S&P 500 exposure, shows Microsoft returning 9.28% versus 14.51% for the comparison through October 5, 2026. That is a year-to-date snapshot; the calendar year is not over. The same comparison records Microsoft trailing in 2024 and 2025:
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| Calendar period | Microsoft total return | S&P 500 proxy total return |
|---|---|---|
| 2024 | +12.93% | +24.89% |
| 2025 | +15.58% | +17.72% |
| 2026 through October 5, 2026 | +9.28% | +14.51% |
These are dividend-reinvested returns reported in the MSFT/SPY annual comparison; SPY is an ETF proxy, not the S&P 500 index itself. The 2026 figures end on October 5, 2026, and should not be read as full-year performance. A separate comparison page updated September 24 reported different year-to-date values, illustrating why a partial-year return needs an explicit cutoff date.
Why dividends matter in this comparison
Total return includes dividends, while a price-only comparison does not. Motley Fool contributing stock market analyst Daniel Sparks explains his approach: “I’m using total return for every year here, because it counts dividends.” The distinction matters in Microsoft’s history: the company announced a one-time special dividend of $3 per share in 2004. A price-only view would omit that shareholder distribution and could misstate performance over a period that includes it.
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The annual figures above are calendar-year total returns, with dividends reinvested in the MSFT/SPY table. They are not fiscal-year returns, price changes alone, or inflation-adjusted returns.
What happened after Microsoft’s two earlier three-year losing streaks?
The historical comparison identifies two prior stretches in which Microsoft lagged the S&P 500 in each of three consecutive years: 2003–2005 and 2010–2012. Their aftermaths were not the same.
| Period | Microsoft total return | S&P 500 comparison | What followed |
|---|---|---|---|
| 2003–2005 | Roughly +15% cumulative | Roughly +50% cumulative | In 2006, both returned about 16%; in 2007 Microsoft gained about 21% versus about 5% for the index. |
| 2010–2012 | Roughly −6% cumulative | Roughly +36% cumulative | In 2013, Microsoft gained about 44% versus about 32% for the S&P 500. |
The cumulative streak figures and the following-year comparisons are rounded historical estimates reported in the cited article. They are useful as examples of what happened next, not as evidence that a similar result is due now.
Why the past streaks are not a 2027 forecast
There are only two identified earlier three-year streaks in this comparison, and they were followed by different paths: a near tie in 2006 before Microsoft outperformed in 2007, versus a sharp Microsoft lead in 2013 after the 2010–2012 stretch. Two episodes are far too small a sample to establish a pattern or predict whether Microsoft will outperform in 2027.
The Motley Fool article offers valuation as one possible part of the explanation for the difference. Its author calculated that Microsoft traded at roughly 23 times fiscal 2005 earnings at the end of the first streak, compared with roughly 13 times reported fiscal 2012 earnings at the end of the second—less than 10 times on the author’s adjusted earnings figure. Those are the author’s calculations, not a guarantee that valuation alone explains the later returns or a rule for what comes next.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A different measurement window can tell a different story
Calendar-year results do not conflict with Microsoft’s official five-year stock-performance comparison, which uses a fiscal-year window. In its 2025 annual report, Microsoft says $100 invested on June 30, 2020, with dividends reinvested, grew to $255.13 by June 30, 2025. The same graph shows $100 invested in the S&P 500 growing to $215.89 over that period. That comparison ends on June 30, 2025 and spans a different set of dates than the calendar-year figures above, so it does not overturn Microsoft’s reported 2024 and 2025 calendar-year underperformance.
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Sources and scope
- The Motley Fool, Daniel Sparks, October 7, 2026 — rounded annual and cumulative comparisons, historical streaks, and the author’s valuation calculations.
- Total Real Returns, MSFT versus SPY — dividend-reinvested annual comparison table; the cited 2026 year-to-date values run through October 5, 2026.
- Microsoft 2025 Annual Report — fiscal-year stock-performance graph and dividend-reinvestment methodology.
- PortfolioLab comparison — secondary cross-check updated September 24, 2026; its year-to-date cutoff is earlier than the October 5 comparison.
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