Microsoft Joins $500B Club, Climbing its Way to the Third Spot After Apple and Google

On Friday, the tech colossus—Microsoft Corporation’s market capitalization reached a significant milestone. It soared past the $500 billion mark, a level unseen since the peak of the dotcom bubble in 2000. This jump in value was sparked by the company’s stock climbing in response to quarterly results that exceeded Wall Street’s forecasts.

Shares of the world’s largest software enterprise experienced a notable surge of up to 2.1 percent. This uptick led to an all-time high stock price of $65.64 during early trading. Consequently, the market valuation of the company touched a noteworthy $510.37 billion.

The last instance Microsoft enjoyed a higher market cap was during the dotcom zenith in March of 2000. At that time, the giant reigned supreme with a market value slightly above $550 billion, according to data from Thomson Reuters.

Despite these impressive strides, Microsoft still lags behind its fierce rivals—Apple, whose market cap stands at a towering $642 billion, and Google’s parent—Alphabet Inc, with a slightly lower but still titanic market value of over $570 billion.

Microsoft’s milestone announcement came on the heels of its second-quarter results on Thursday, in which the tech titan exceeded analysts’ average estimates for both revenue and profit. The company’s growth, primarily due to its fervently expanding cloud computing business, sees it outstrip Wall Street’s predictions for seven out of the last eight quarters.

Chief Executive Satya Nadella has been steering the Microsoft ship towards a revitalization since his taking of the helm in 2014. By focusing considerably on cloud-based services, Nadella has significantly boosted Microsoft’s credibility in new growth sectors. This progressive approach has contributed immensely to the stock’s upscale. The company’s market value was just about $315 billion, and its stock was trading around $34 when Nadella became CEO, as per data from Thomson Reuters.

“The pieces are falling into place for Microsoft, as we witness an important shift in the model. There’s an evident improvement in profitability in their growth segments,” stated the analysts at RBC Capital Markets.

In a vote of confidence following the announcement, at least 11 brokerage firms decided to raise their price targets on Microsoft’s stock, with the median price target advancing from $68.00 to $68.50. Given the bullish sentiment, of the 37 analysts covering the stock, 27 rate it a “buy” or higher, while eight have a “hold” rating, and two rate it a “strong sell”.

As Microsoft continues its careful climb towards the top, it is worth noting that its success can be attributed in great part to its persevering leadership and strategic shifts, proving once again the company’s resilience in this fast-paced, ever-evolving tech world.

Source: Reuters