Microsoft has achieved an impressive feat by becoming the second U.S. organization to enter the USD 2 trillion market value club. The Redmond Washington technology company crossed the 2 trillion mark on June 23, thanks to its profitable cloud computing business and Microsoft 365.
The only other American company to achieve this rare feat is Microsoft’s rival, Apple. Apart from these two tech giants, the oil manufacturer Saudi Aramco is the only non-American organization that crossed the USD 2 trillion market capitalization milestone.
Under CEO Nadella’s leadership, Microsoft reached USD 1 trillion in value in 2019. In two years, the market value has doubled and is continuing to go strong. Over the year, the shares of the Windows OS manufacturer have grown 19%.
This stock growth eclipsed Apple’s and Amazon’s individual stock growth. This achievement is riding on the coattails of the blowout third-quarter results, which surpassed Wall Street estimates, mainly due to the thumping performance of Azure.
When Satya Nadella took charge as the CEO, the tech giant had begun losing its sheen. Despite its massive net worth, Wall Street chose not to include Microsoft in the heavy market movers group termed FAANG, which constitutes Facebook, Apple, Amazon, Netflix, and Google.
However, this perception changed after Nadella fast-tracked Microsoft’s progress by emphasizing Azure, Xbox, and Microsoft 365.
“We are building Azure to address organizations‘ needs in a multi-cloud, multi-edge world,” CEO Nadella said in a call with analysts. Today, Azure is the second biggest cloud tech trailing behind Amazon’s AWS.
The market capital of Microsoft will continue to grow as Azure is continuing to gain popularity among cloud subscribers. In addition, the demand for Azure has increased immensely due to the global remote working conditions.
As per Bloomberg’s data analysis, the intelligent cloud business formed up 33.8% of Microsoft’s revenue. Buttressing this segment are two more segments, Productivity and Business Processes and More Personal Computing unit, which experienced 13% and 6% revenue growth.
As some of the offices reopened, Microsoft has swooped into the cloud market with new features that fostered productivity and wellness promotions as employees complained of burnouts. Microsoft is also expanding as it has acquired the speech recognition company Nuance Communications. This acquisition was largely made to refine Azure’s health industry offering. As Nadella said, “(Nuance acquisition) will bring our solutions directly into the physician-patient loop, which is central to healthcare delivery.”
Although the milestone is mostly symbolic, it epitomizes Microsoft’s name in Wall Street history. Moreover, the achievement vindicates that Nadella is steering the Azure manufacturer in the right direction as Microsoft first entered the trillion club under his leadership.
Although it took 33 years for Microsoft to cross the 1 trillion market cap milestone after its IPO, market analysts are projecting the company to hit the USD 3 trillion market value. Their projections are based on the increasing appetite for Azure, Xbox, and Microsoft’s new releases. Buttressing this observation is the CEO’s statement that Microsoft is building for the next decade and beyond while releasing the Windows 11 OS.
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