After artificial intelligence triumphant Nvidia, Microsoft is now the second company to ever have a market valuation of more than $4 trillion.
Microsoft, which trades under the ticker “MSFT,” is up 4.6 percent as of Thursday’s noon in New York City (16:00 GMT) from the market open.
The technology ghetto announced that it will invest $30 billion in capital to meet growing demand for artificial intelligence (AI) for the first quarter of the current fiscal year. Microsoft also reported strong sales growth for its cloud computing business, Azure, on Wednesday.
Despite the high cost of AI capital expenditures, lead portfolio manager, Stonehage Fleming Global Best Ideas Equity Fund, Gerrit Smit, said, “It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI. It is doing so very profitably and cash generatively.”
Microsoft, headquartered in Redmond, Washington, broke the $1 trillion mark for the first time in April 2019.
Its move to $3 trillion was more measured than that of tech giants Nvidia and Apple, with AI-bellwether Nvidia clinching the $4 trillion milestone before any other company on July 9 and tripling its value by almost a year.
Revenue surpassed $76.4 billion in its earnings report.
‘Slam-dunk’
In a note to Al Jazeera, senior analyst at Wedbush Securities, Dan Ives, senior analyst at Microsoft, stated that “this was a slam-dunk quarter for Microsoft,” “with cloud and AI driving significant business transformation across every sector and industry.”
Microsoft’s multibillion-dollar investment in OpenAI has turned out to be a game-changer, boosting the company’s Office Suite and Azure offerings with cutting-edge AI, and increasing the stock’s value by more than double since ChatGPT’s late-2022 debut.
Its largest capital expenditure forecast ever for a single quarter indicates that it is on track to potentially outspend its rivals over the coming year.
According to Amy Hood, executive vice president and chief financial officer of Microsoft, “We closed out the fiscal year with a strong quarter, highlighted by Microsoft Cloud revenue reaching $46.7 billion, up 27 percent]up 25 percent in constant currency] year-over-year.”
However, the tech giant’s wave of layoffs overshadows Microsoft’s rise in market value. The business doubled on AI while firing 9, 000 workers, or 4 percent of its global workforce, earlier this month.
In recent months, progress has been made in trade negotiations between the US and its trading partners in preparation for US President Donald Trump’s August 1st tariff deadline, which has helped to boost stocks and set new highs for the S&, P 500, and Nasdaq.
As a result of artificial intelligence’s supercharged expansion of its core advertising business, Meta Platforms forecasted a third-quarter revenue that was beyond Wall Street’s expectations.
