Microsoft joins Apple in $ 2 trillion club Business և economics news

Microsoft Corp. is listed in the history books as the second largest US public company with a market capitalization of $ 2 trillion, which is stimulated by its dominance in cloud computing and business applications in the coronavirus world.

Shares of New York rose 1.2 percent on Tuesday, enough for the software company to join Apple Inc. for a short time, as it was one of only two such high-priced companies to trade for less than $ 265.51 a penny. closing. Saudi Aramco bypassed that threshold briefly in December 2019, but currently has a market value of about $ 1.9 trillion.

Since taking office in 2014, CEO Satya Nadella Redmond, based in Washington, D.C., has transformed into the largest vendor of cloud computing software, including both its infrastructure and its Office cloud computing units. Microsoft is one of the largest tech companies in the United States that has so far avoided the recently observed wave of activating US antitrust regulators, making it easier to “achieve” product expansion.

Nadella transformed Microsoft to become the largest seller of cloud computing [File: Samyukta Lakshmi/Bloomberg]

So far this year, Microsoft has gained 19%, surpassing Apple և Inc. as investors have accumulated shares in long-term growth, earnings expectations, as well as machine learning and cloud computing expansion. The company’s results for the third quarter, published in late April, exceeded expectations and showed strong growth in its business segments.

The technically burdensome Nasdaq 100 index surpassed the S&P 500 index on Tuesday after Federal Reserve Chairman ome Jerome Powell reiterated his view that inflation would be short-lived. Both benchmarks boosted profits by 0.9% after the Powell comments closed the Nasdaq 100 and the S&P 500 rose 0.5%.

Microsoft “puts its hands in a lot – it does everything well. Games, cloud, automation, analytics, AI, ”said Hillary Frisch, senior research analyst at Clearbridge Investments. “It’s an attractive name in technology, it should benefit from both the reopening of the economy and a clearer shift to the cloud.”

Founded in 1975 by Bill Gates և Paul Allen, Microsoft created the personal computer software industry և for many years dominated the computer և office software market. As web browsers like Netscape grew in the 1990s, Microsoft began to introduce its own product that bundled with Windows software. This led to an antitrust lawsuit filed by the US government in 1998, and a federal judge found the company guilty in 2000.

Although Microsoft avoided breaking its business, a sanction previously sought by the government in an antitrust case, the software maker over the next decade largely missed the advent of mobile software, social media, and Internet search, lagging behind new competitors such as Google. : Like Apple. Over the past seven years, in several strategic shifts, Nadella has restored Microsoft to the forefront of technology by focusing on the cloud, artificial intelligence, and mobile computing.

Bill Gates և co-founder of the late Paul Allen Microsoft’s IPO for 33 years to reach $ 1 trillion market cap [File: Barry Sweet/ Bloomberg]

Although it took Microsoft 33 years from its IPO to reach its first $ 1 trillion in value in 2019, the next trillion was just two years before the Covid-19 epidemic, amid rising tech stocks during the health crisis. Apple went down in history as Wall Street when it reached $ 2 trillion last year.

The pair is second only to Amazon in the US, with a market value of almost $ 1.8 trillion, and Alphabet Inc., which is valued at about $ 1.6 trillion.

“Microsoft checks all the boxes. “Investors are in favor of the markets, it offers strong, sustainable growth, it remains in a very good position to take advantage of long-term global trends in technology,” said analyst Logan Purk. Edward ones onsum. The $ 2 trillion estimate is “guaranteed, given how it rotated relative to the cloud, it remains attractive, even with strong performance.”

According to data compiled by Bloomberg, more than 90% of analysts recommend buying Microsoft, while no one has an adequate rating for the sale of shares. The average price target indicates an increase of about 11% at the current level.

Growth drivers

Microsoft’s cloud computing business has been a central force for advancement. According to data compiled by Bloomberg, the Intelligent Cloud business has made Microsoft 2020. 33.8% of revenue, making it the largest of the three major sectors for the first time, compared to 31% in 2019. The share showed a 24% increase in revenue. last year, compared with a 13% increase in productivity և business processes 6 a 6% increase in more personalized units of Microsoft.

Nadella’s strategic moves have allowed Microsoft to take advantage of business trends emerging from the global epidemic. Blockages and remote work accelerated the transition to the company’s meeting software, prompting customers to accelerate cloud network software և software upgrades. Software’s Xbox game subscriptions have tempted users who are looking for a distraction for the rest of the month at home.

When employees return to the office, Microsoft has tried to come up with new ideas for managing meetings, where some attendees are in person և some distance away, և working for employees առողջ to increase productivity, which, according to the company, burned due to hardship : last year

“At a high level, the two mainstays of Microsoft’s bull story, Microsoft 365 և Azure, are well understood by the investment community,” wrote William Blair analyst Eason Ader in May. “Which, to say the least, underestimates how Microsoft has expanded its IT portfolio over the last 15 years by expanding into new product areas,” he said. The share of the wallet has doubled from 2006 to 2020, “we believe it can double again in the next decade,” it said.

Wall Street also praised the company’s M&A strategy. It was recently announced that Nuance Communications Inc., a pioneer in speech recognition, was leaving. The company also tried to acquire Discord Inc. for $ 12 billion, but the video game chat company rejected Microsoft’s offer.

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