Microsoft Went 240 Trading Days Without a Record Close. History Says What Usually Happens Next.

Microsoft (NASDAQ:MSFT) finished Tuesday, Oct. 13, at $543.45, its first record close since Oct. 28, 2025, when shares ended the day at $542.07. All told, 240 trading days passed between the two records.

The stock didn't drift sideways in between. It dropped to $352.83 by June 25, around 35% under the last record, before rising about 54% to get back.

Microsoft has gone at least 150 trading days without a record close seven other times since it went public in 1986. For five of them, the stock was up a year after the wait ended. For the other two, it was down -- and the two misses have something in common with the wait that just ended.

Image source: The Motley Fool.

Seven long waits

The numbers here use split-adjusted closing prices from March 1986 through Oct. 13. "A year later" means the price on the same date a year after the new record (or the trading day before, if the market was closed), leaving out dividends.

The first wait started just two weeks before the stock market crash in October 1987, when the Dow Jones Industrial Average (DJINDICES:^DJI) dropped 22.6% in a day. Microsoft lost around half its value by late October and didn't close at a new record until Oct. 5, 1989, 507 trading days later.

A year after that, shares were up about 63%.

The 1990s saw three more waits. Each lasted 193 to 241 trading days, with a fall of 24% to 26% along the way. The waits that ended in May 1994 and April 1996 were followed by gains of around 67% and 96% in the next year.

But the one that ended in October 1992 was followed by a 9% drop.

Then came the long one. The company's record close on Dec. 27, 1999, stood until Oct. 21, 2016, nearly 17 years later. At the March 2009 low, shares traded around 75% under the 1999 record. A year after the 2016 record, they were up about 32%. (With prices that also adjust for dividends, that wait ended in 2014 instead.)

The last two waits split. The period from November 2021 to June 2023 saw a 38% fall, and the stock rose around 27% over the next year. The wait from July 2024 to June 2025 had a 24% drop, and shares were about 11% lower a year after it ended.

What went wrong in 1992 and 2025?

In both misses, the stock kept rising for a few more months after the new record. Then it peaked, and another long wait began.

After the October 1992 record, Microsoft rose around 10% further to a record close on June 1, 1993. That close started the 241-trading-day wait that ran till May 1994, and the drop during it dragged the one-year return below zero.

The June 2025 record played out almost the same way. Shares gained around 16% more to the Oct. 28, 2025 high, which began the wait that just ended. By June 5, 2026, the stock was around 11% under the June 2025 record.

In other words, both misses came from a second long wait starting within months of the first one ending.

Notably, the only other time a long wait began within a year of the last one ending was 1993. And when that wait finally ended in May 1994, shares climbed around 67% in the next year. Of course, seven cases are a small sample, and one match might easily be a fluke.

Microsoft got cheaper while it waited

I'd put more weight on what the company did while the stock stood still.

At the Oct. 28, 2025 record, Microsoft's price-to-earnings ratio was around 40, based on earnings of $13.64 a share in fiscal 2025 (Microsoft's fiscal years end June 30). At Tuesday's record close, it cost around 30 times earnings. That's because earnings per share gained 32% to $17.95 for fiscal 2026. Even leaving out the effect of Microsoft's investment in OpenAI, the non-GAAP (adjusted) number rose 22%.

Put another way, each dollar put in the stock at Tuesday's close bought almost a third more earnings than it did at the last record. Microsoft's fiscal 2027 first-quarter report, due Wednesday, Oct. 28, might show if the growth is holding up.

All told, five of seven is a decent record. But I wouldn't count on a pattern so thin. What I find more convincing is that Microsoft arguably grew into its valuation while the stock went nowhere. And with adjusted earnings up 22% last fiscal year, paying around 30 times earnings for the stock today seems reasonable to me.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.