Steve Ballmer, the former Microsoft Corporation MSFT CEO has placed more than 80% of his investment portfolio in one stock, and his approach has paid off handsomely.
What Happened: In a Q&A with The Wall Street Journal that was published on Sunday, Ballmer shared that over 80% of his holdings are tied to his former company, Microsoft, with the remainder invested in stock index funds.
He attributes his financial success to Microsoft’s strong performance, particularly after the AI boom sparked by Microsoft-backed OpenAI’s ChatGPT in November 2022.
"Microsoft's outperformed just about every other asset I could have owned," he stated, adding, "It's a little hard to say that it hasn't worked out."
Ballmer holds a 4.5% stake in Microsoft. Since 2020 till now, Microsoft has returned an average of 28.37% annually, significantly outperforming the S&P 500's average return of around 11.08%.
When Ballmer was asked if his strategy applies to everyday investors, he said, “I'd suggest keeping it simple—unless you're truly committed to becoming an expert.”
Microsoft currently has a market capitalization of $3.346 trillion, making it the third most valuable company in the world. According to data from Benzinga Pro, Microsoft shares have risen by 17.72% year-to-date.
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Why It Matters: Ballmer’s strategy is influenced by Warren Buffett, who recommends S&P 500 index funds for retail investors.
Now worth $151 billion, according to the Bloomberg Billionaire Index, Ballmer also has a significant investment in the Los Angeles Clippers, which has appreciated since his $2 billion purchase in 2014, now valued at $5.5 billion.
Earlier this year, Ballmer’s wealth surpassed that of Microsoft co-founder Bill Gates. Although, at the time of writing, Gates is at number seven on the Index with a net worth of $160 billion.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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