After strong quarterly results, Microsoft’s market value surpasses the 4 trillion dollar mark. Not a first, but like Nvidia, Microsoft is benefiting greatly from the AI frenzy.
As expected by analysts, Microsoft once again presented a strong quarterly report on Wednesday night. The reward followed immediately: the company’s total market value increased by 313 billion dollars in one go. With that boost, Microsoft became the second company ever to cross the mythical four trillion dollar threshold.
The first was reserved for Nvidia, which crowned itself as the stock market record holder last month. Although both companies operate in different layers of the stack, they share the advantage of capitalizing on the AI frenzy. Microsoft saw its annual revenue from Azure cloud services rise to 75 billion dollars, 34 percent more than during the previous fiscal year.
From Software Vendor to Cloud Giant
Microsoft’s current success is due to the successful cloud transition it initiated back in 2008. Microsoft’s roots lie in Windows and software, but the company recognized early on that the big money was to be found in the public cloud. Today, Microsoft is the second largest public cloud provider after AWS, which reported an annual revenue of 107 billion dollars.
Microsoft quickly established itself as a major AI player by securing OpenAI. To this day, Microsoft remains the primary cloud partner of OpenAI, which wants to explore other avenues. With Copilot, Microsoft attempts to play the entire AI stack, but that has not yet proven to be an unqualified success.
Despite the financial success, not everything is smooth sailing at Microsoft. Like many large companies in the tech sector, Microsoft recently cut its workforce: 9,000 employees were let go. For the laid-off workers, the positive figures will hit extra hard. The downside of Microsoft’s success is that its dominant market position faces resistance from policymakers, especially in the European Union.
read also
David versus Goliath: where is the European Microsoft?
Who’s Next?
Now that Microsoft has joined Nvidia as the second company in the four trillion dollar club, speculation can begin on who will be next. The most likely candidate is Apple: the iPhone maker already has a market value of over three trillion dollars and was the stock market champion until 2022.
However, Apple has somewhat missed the AI train and needs to catch up. The other major tech giants Alphabet/Google, Amazon, and Meta are camping between one and two trillion dollars in market value and still have a long way to go to reach four trillion.