Microsoft has crossed the $4 trillion mark in market value — only the second company ever to do so, after Nvidia. In after-hours trading on July 30, its stock hit $557.03, putting the company’s value at about $4.14 trillion, per Reuters and CNN Business.
It’s been quite a climb. Microsoft first hit $1 trillion in April 2019, then slowly made its way up to $3 trillion early last year. This latest leap came after an amazing earnings report. The company is now planning a record $30 billion in capital spending for the next quarter, as its Azure cloud business booms — pulling in over $75 billion in annual revenue.
Cloud Plus AI Equals Growth
Microsoft’s big push into AI and cloud services — especially with Azure — is paying off. Azure’s revenue jumped 39%, beating the 34.5% growth everyone expected. Even better, it accounted for more than half of Microsoft’s $110 billion cloud revenue back in fiscal 2023.
This growth is further supported by Microsoft’s integration of AI into its products, notably through its early investments in OpenAI, which reached a $157 billion valuation by October 2024, as per The New York Times.
Microsoft and partners launched the Global AI Infrastructure Investment Partnership (GAIIP) in September 2024, initiating with $30 billion in seed funding and targeting a $100 billion total in infrastructure investments. The fund prioritizes U.S. data centers and energy infrastructure, with Nvidia contributing technical guidance.
Some Investors Skeptical of Hype
While many investors remain bullish on Microsoft’s AI-driven future, some are sounding the alarm.
Investor Steve Weiss, for instance, has raised concerns about the company’s valuation, stating that MSFT does not “deserve the valuations” at which it is trading, noting excessive multiples and Wall Street banks’ worries about growth and valuation, according to a report by Insider Monkey.
CNBC’s “Trade Tracker” on February 11 showed Weiss trimming his Microsoft holdings, indicating a cautious stance.
The laying off of 15,000 workers this year, with 9,000 job cuts in early July alone, highlight the strain of scaling up.
Can Microsoft Top $5trn?
Some folks, like Dan Ives over at Wedbush, think that in the next three years, more than 70% of Microsoft’s users will be tapping into AI features — and if that plays out, Microsoft could be worth about $5 trillion by 2026.
Still, everyone’s asking whether this rocket-ship growth can keep going. Microsoft’s spot as a top tech player isn’t really in doubt, but with expectations so high, its price tag will stay under the microscope as the AI craze evolves.
Author: Richardson Chinonyerem
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
#Microsoft #Nvidia #Azure #MarketCap
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