On Wednesday, Microsoft achieved a historic milestone, becoming the second company ever to reach a market value of $3 trillion, propelled by the surge in artificial intelligence.
This places Microsoft’s market value ahead of France’s entire GDP and closely behind that of the United Kingdom.
The company’s stock climbed nearly 1.5% to around $405 per share, surpassing the $3 trillion market capitalization mark, joining Apple as the only other company to achieve this feat.
Microsoft’s shares have risen over 7% year-to-date, following a remarkable 40% increase last year, largely driven by investor optimism surrounding AI and its potential for growth.
In 2023, CEO Satya Nadella spearheaded a multibillion-dollar investment in AI, integrating AI tools like ChatGPT into Microsoft’s products, positioning the company competitively in the AI space.
This move strengthened Microsoft’s collaboration with OpenAI, a leading AI innovator, amidst leadership changes at the latter.
After trailing Apple for much of the past decade, Microsoft briefly emerged as the world’s most valuable publicly traded company earlier this January.
Microsoft, alongside other tech giants like Apple, Nvidia, Amazon, Alphabet, Meta, and Tesla, collectively known as the “Magnificent 7,” has significantly bolstered market performance in recent weeks.
Microsoft alone constitutes 7.3% of the S&P 500 index, with these seven stocks commanding a market cap surpassing that of most countries’ entire stock markets, except the United States.
Notably, Nvidia and Microsoft alone accounted for approximately 75% of the S&P 500’s gains this year.
Analysts from Morgan Stanley and Bank of America foresee Microsoft’s AI initiatives gaining further momentum, with both firms raising their price targets for the stock.
Morgan Stanley increased its target to $450 from $415, anticipating Microsoft’s continued growth.
Bank of America also adjusted its target to $450 per share, citing expectations of strong performance in the upcoming quarter.
Microsoft is scheduled to report its fourth-quarter earnings on January 30.
Source-CNN
