On Wednesday, tech giant Microsoft Corporation made history by becoming the second U.S.-based publicly traded company to reach a market valuation of USD 2 Trillion, with investors betting the company’s cloud computing and enterprise software dominance will increase further as the world adjusts to a hybrid and remote workspace.
On Tuesday, shares of Microsoft rose nearly 1.2% on the NYSE, which was enough for the company to join Apple Inc. for a short time in the exclusive $2 trillion club. The software company became one of the only two companies trading at such a high value before it closed at USD 265.51 per share, slightly short of the mark. Microsoft reached the USD 2 trillion market two years after it crossed the USD 1 trillion market capitalization value. The valuation of the company can be attributed to a positive year for Microsoft as it managed to gain 19% year-on-year and has performed better than other Big Tech, Apple and Amazon amidst the COVID-19 pandemic. The recently announced better-than-expected third-quarter results demonstrated robust growth across all its business segments. The advent of COVID-19 pandemic played a crucial role in the growth of the tech giant as more and more people and companies started adapting to work-from-home and study-from-home which resulted in increasing demand for PCs, gaming consoles, and cloud computing platforms to streamline businesses and workplace. The Intelligent Cloud business of Microsoft accounted for nearly 34% of revenue in 2020 while subscriptions for Xbox gaming also surged with users looking for entertainment and diversion during the lockdown. Microsoft CEO, Satya Nadella, back in April had said the company is building next-gen cloud and expand their market base and bring about innovation across every layer of tech stack to increase resiliency and transformation in businesses. Since 2014, being at the helm of the company CEO Satya Nadella has transformed the company into the largest cloud-computing software provider on a global level.
It took Microsoft nearly thirty-three years from its IPO to reach an m-cap of USD 1 trillion in 2019 but it took only two years for the company to join the USD 2 trillion club as tech shares surged amid the global health crisis. Back in August 2020, Apple made history when it became the first public company to reach USD 2 trillion valuation and it is now valued at USD 2.24 trillion. The only other company to surf near the valuation is oil giant Saudi Aramco, which touched the m-cap valuation in December 2019, but its current m-cap is USD 1.9 Trillion.