Microsoft Corp. (NASDAQ: MSFT) achieved a $3 trillion market valuation on Jan. 24, 2023, fueled by the burgeoning optimism in artificial intelligence (AI), marking a significant milestone in its journey.
On Wednesday, Microsoft's shares soared by 1.4% to $404, briefly propelling the company beyond the coveted $3 trillion mark and placing it in close competition with Apple Inc. (NASDAQ: AAPL) for the title of the world's most valuable company.
Microsoft's Stellar Performance: A Closer Look
- Market Valuation: Microsoft briefly outpaced Apple, the first company to reach a $3 trillion market cap, before settling back.
- Yearly Growth: The company has seen an impressive 67% growth over the past year, matching its 2009 performance.
- AI and Growth: Investors are particularly enthused by Microsoft's prospects in AI, especially through its partnership with OpenAI Inc. AI-powered services are expected to drive significant growth in earnings and revenue.
- Financial Outlook: Analysts forecast a revenue of $243.16 billion in 2024, a 14.7% year-on-year increase. Earnings per share (EPS) are predicted to reach 11.2, marking a 14.3% rise. The forward price-to-earnings ratio stands at 36x, close to its record high of 36.8x in November 2021.
- Cash Reserves: Microsoft boasts a substantial cash reserve of $143.94 billion.
Microsoft is a core holding in 513 ETFs, with U.S.-based ETFs owning 13% of Microsoft's outstanding shares.
Microsoft holds a staggering 22% weight in the Technology Select Sector SPDR Fund (NYSE: XLK).
The tech giant has a substantial 21% stake in the Fidelity MSCI Information Technology Index ETF (NASDAQ: FTEC) and a 20% weight in the iShares Global Tech ETF (NYSE: IXN).