Microsoft crossed a $3 trillion market capitalisation for the first time in its history Wednesday, commemorating the long-time tech leader’s massive artificial intelligence win.
Microsoft CEO Satya Nadella has led his company to a record market value amid the AI boom.
AFP via Getty Images
Key Takeaways
- Shares of Microsoft rallied in morning trading as much as 1.5% to $404.72, their highest price ever.
- That sent Microsoft’s market cap to $3.004 trillion.
- Apple, which became the only firm to ever score a $3 trillion valuation last summer, remains slightly more valuable than Microsoft, with a $3.03 trillion market cap Wednesday.
- The $3 trillion milestone caps a dramatic rise for Microsoft coinciding with a broad technology rally and its backing of OpenAI, producer of the hit generative AI chatbot ChatGPT.
- Since ChatGPT’s November 2022 release, shares of Microsoft are up more than 60%, beating the S&P 500’s roughly 20% rise and the tech-heavy Nasdaq’s nearly 40% jump during the period, also topping Apple stock’s roughly 30% gain during the timeframe.
- Microsoft became one of the few major firms to translate intensifying AI interest into tangibly better financial results, as the firm has posted record revenues in each of its last two fiscal quarters, buoyed by 20% year-over-year growth in its AI-heavy intelligent cloud division.
Key Background
Wednesday’s gains came during a broad tech rally on the back of Netflix’s strong earnings report, as the Nasdaq rose almost 1%. Microsoft first reached a $1 billion market cap in 1986, its first year as a public company. The firm briefly overtook Apple as the most valuable company in the world earlier this month. Microsoft and Apple are among the “magnificent seven” big tech stocks driving much of the stock market’s recovery dating back to 2022, joined by Alphabet, Amazon, Meta, Nvidia and Tesla. All seven of those companies have benefited from investors’ desire for exposure to AI, though only four (Apple, Meta, Microsoft and Nvidia) have risen to all-time highs.
Crucial Quote
Microsoft “continues to dominate market share within the AI transformation taking place despite increased competition,” Wedbush analyst Dan Ives wrote in an October note to clients.
What To Watch For
Microsoft will report quarterly earnings next Thursday. Analysts project the company to report $61 billion in sales, according to FactSet, which would be another all-time high.
Tangent
Another big-tech company notched a major market cap milestone Wednesday: Meta. The Facebook parent company registered a $1 trillion valuation for the first time since 2021.
This article was first published on forbes.com and all figures are in USD.
