Microsoft follows Apple in reaching $2 trillion valuation

midian182

Posts: 6,916   +62
Staff member
What just happened? Microsoft and Apple have a rivalry that goes back decades, so Cupertino likely felt pretty smug when it became the first US company to reach a $2 trillion market cap last year. But the Windows maker has now joined its competitor in this very exclusive club by becoming the second US public company to hit a $2 trillion market value.

Microsoft’s shares rose 1.2% on Tuesday, pushing its market cap past $2 trillion. The only company other than Apple to hold a value this high was Saudi Aramco, the world’s biggest oil firm, which passed the milestone briefly in December 2019 but currently has a market value of $1.9 trillion.

Like many tech giants, Microsoft has seen its bottom line improve throughout the pandemic. The company beat expectations and experienced its largest revenue growth since 2018 during the last quarter—$41.7 billion—while its $15.5 billion profit was up 44%. The shares are up almost 20% this year, outperforming Apple and Amazon.

As noted by Bloomberg, it took Microsoft 33 years from its IPO to reach its first $1 trillion valuation in 2019, but hitting $2 trillion took around two years, thanks in no small amount to the Covid-19 effect and the massive growth of its cloud business.

“Microsoft checks all the boxes: it is in the markets that investors favor, it offers strong and sustainable growth, and it remains very well positioned to capitalize on the long-term secular trends we see in technology,” Logan Purk, an analyst at Edward Jones, told Bloomberg. A $2 trillion valuation “is warranted, given how it has pivoted toward the cloud, and it remains attractively valued even given the strong performance.”

Image credits: The Art of Pics and Daniel Constante

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NicktheWVAHick

Posts: 284   +400
That’s way too much money. They need to give at least half of it to disadvantaged minorities, illegal immigrants and homeless people. Then everything will be right in the world.
 

VariableSpike

Posts: 56   +73
That’s way too much money. They need to give at least half of it to disadvantaged minorities, illegal immigrants and homeless people. Then everything will be right in the world.
Market cap is not the same as profit, market cap is the total value of all outstanding shares (I.e. ones that can be bought) - not to say that MS doesn't have a ton of profit, but it's nowhere near 2 Trillion
 

ypsylon

Posts: 366   +286
The only milestone hit here is how low USD has devalued.

When $1 is no longer enough to buy a single roll of toilet paper, and you end up wiping with $1 instead...

Exactly right. Whole World is printing money without any real value and inflation is eating everything. Enough to say that Rockefeller was first US billionaire (with valuation slightly below actual billion of then USD). That's well over 400 billions of current USD. I wouldn't call that an improvement.

Market valuation is in large part a gimmick anyway, with large quota being associated with brand illusory value which can go poof! with one bad decision.