Microsoft makes history today with its market value

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(Bloomberg) – Microsoft Corp. claims its place in history, positioning itself as the second US public company to reach a market value of $ 2 trillion. It is driven by bets that its dominance in cloud computing and business software will expand even further in the post-covid world.

Its shares rose 1.2% in New York on Tuesday, enough for the software company to briefly join Apple Inc. as one of only two companies to trade at such a high value. But it closed just pennies below the benchmark, at $ 265.51. Saudi Aramco briefly eclipsed that threshold in December 2019, but it currently has a market value of about $ 1.9 trillion.

Since taking the reins in 2014, CEO Satya Nadella has transformed the company, making it the largest cloud computing software vendor, taking into account its infrastructure and Office application cloud units. Microsoft is also the only one of the largest US technology companies that has so far avoided the recent wave of scrutiny from US antitrust regulators, giving it more freedom in both acquisitions and product expansion.

Microsoft is up 19% year-to-date, outperforming Apple and Inc. Third-quarter results, released in late April, exceeded expectations and reflected strong growth in all of its business segments.

Microsoft “has a lot on its hands and it’s doing it right: gaming, cloud, automation, analytics, artificial intelligence,” said Hilary Frisch, senior research analyst at Clearbridge Investments. “It is a name with an attractive value in the technology sector, and it should benefit from both the reopening of the economy and a more pronounced shift to the cloud.”

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Co-founded in 1975 by Bill Gates and Paul Allen, Microsoft created the personal computer software industry and dominated the market for PC operating systems and Office software for years. As Internet browsers like Netscape grew in importance in the 1990s, Microsoft was quick to introduce its own product that it bundled with Windows software. This led to an antitrust lawsuit, filed in 1998 by the US government, and a federal judge found the company guilty in 2000.

Although Microsoft avoided a breakdown of its business, the sanction the government originally sought in the antitrust case, over the next decade the software maker largely missed out on the advent of mobile software, social media, and internet searches. lagging behind newer rivals like Google and more agile like Apple. In the past seven years, Nadella has once again positioned Microsoft at the forefront of technology with a focus on the cloud, mobile computing, and artificial intelligence.

While it took Microsoft 33 years from its IPO to achieve its first trillion dollars in value in 2019, it reached the next trillion in just two years or so, on the increased popularity of technology stocks before the covid-19 pandemic and during the health crisis. Apple made Wall Street history when it hit $ 2 trillion last year.

Among the American names, this pair is followed by Amazon, which has a market capitalization of almost US $ 1.8 trillion, and Alphabet Inc., with a value of approximately US $ 1.6 trillion.

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