On January 24, the tech giant Microsoft officially crossed the $3 trillion milestone in market capitalization. Microsoft’s stock increased 1.5% in early trading to reach a record high of $404.72. As a result, Microsoft’s market value increased to $3.004 trillion. The internet giant has surpassed Apple as the second firm to attain this milestone; the iPhone maker Apple accomplished it in summer of last year.
Reasons for Microsoft’s explosive growth
The tech giant’s shares were up 1.17% to $403.78 a share on the NASDAQ on Wednesday. The stock opened the day at $401.48, above the close of $398 per share the day before.
A significant portion of its gains, according to sources, are attributed to investor confidence about artificial intelligence (AI) and its potential to drive revenue and earnings growth. Microsoft is leveraging this trend through its partnership with OpenAI Inc., positioning itself as one of the main beneficiaries of artificial intelligence. The company has improved its market perception by introducing AI-enhanced services.
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Microsoft is expected to maintain its long-term growth trajectory due to the expected increase in demand for AI services and the requisite cloud computing infrastructure. According to projections, revenue growth in the fiscal year 2024 is expected to be close to 15%, outpacing the growth rate of the more general technology industry (Bloomberg Intelligence: insights).
Market Analysts’ assessment of this growth
According to Citi analysts, Microsoft’s expertise in generative AI will help it post a “solid beat” in its upcoming second quarter earnings report. In a report on Wednesday, the analysts increased their buy recommendation for the stock and lifted their target price as well.
According to reports, Microsoft is now one of the most sought-after stocks on Wall Street as a result of its strong growth.