Microsoft recently accomplished an unprecedented achievement: overtaking Apple as the world?s most valuable public company temporarily. This milestone represents Microsoft?s early lead in generative AI through their investment in ChatGPT-maker OpenAI.
Microsoft’s revenue model, built upon software licensing and cloud computing, has proven very profitable; while emerging market slowdown and regulatory scrutiny could hurt Apple.
Microsoft’s AI-fueled stock rally
Microsoft shares surged 57% during 2023 due to expectations that its leadership in artificial intelligence would boost market capitalization over Apple, though the victory proved fleeting.
Wall Street Zen has reported that investor enthusiasm for artificial intelligence (AI) has caused shares of companies like Google, Amazon and Meta to increase. Microsoft saw its share price jump after unveiling Copilot for Microsoft 365 which allows users to incorporate AI functions into Office documents and other projects.
Nadella became one of the richest tech CEOs ever with his stock rise, becoming worth more than $154 billion – more than combined net worths of Amazon and Google CEOs combined! That puts Microsoft in an advantageous position to benefit from AI without needing to develop devices such as phones or tablets itself; freeing up more capital for investment into cloud computing services and productivity software businesses.
Its resilience in emerging markets
Emerging market equities showed resilience during a sharp selloff in global markets during the first quarter of 2023, reflecting investors’ belief that they would perform better than advanced countries. This resilience can be attributed to various factors including strong macroeconomic fundamentals, low debt levels and central bank independence.
Microsoft was initially founded as an IBM PC compatible software vendor in 1980; it quickly rose to worldwide fame when they released Windows in 1989 and then their Office Suite the following year. They are renowned for creating cutting-edge products, with commitments to design quality that have won them consumer loyalty.
They may have taken time to reach its $3 trillion valuation, but now stands on its way to becoming one of the world’s most valuable public companies alongside Apple, Saudi Aramco, Alphabet Inc and Amazon.
Its preference on Wall Street
Since 1975 when its founders Bill Gates and Paul Allen established Microsoft, its business has expanded from computer software to consumer tech and then cloud services. Popular products like its iPhone/iPad smartphones, Mac computers and XBox gaming hardware make them one of the world’s premier tech brands.
Microsoft has long taken risks to grow its market share, and those bold moves paid dividends. Even during 2022’s COVID-19 stock market collapse and subsequent economic decline, when other large corporations experienced value losses due to economic weakness, Microsoft saw its stocks steadily climb.
If the company continues to make smart investments in artificial intelligence, it could become the next company to reach the trillion-dollar milestone. That would be good news for an industry desperately in need of new growth drivers; investors have proven they believe AI is not just hype. This article was written by Dave Lee of Bloomberg Opinion columnist and US technology correspondent fame.
Its focus on cloud computing
Microsoft was in considerable peril a few years ago. Consumers weren’t purchasing as many personal computers, license sales for Windows operating system were declining and its marketshare had begun eroding against competitors like Facebook, Google and Amazon.
Under new CEO Satya Nadella, Microsoft has made a shift. Instead of selling consumer software and hardware directly to consumers, its focus has shifted more toward business software delivered via cloud platforms with long-term contracts attached.
Microsoft’s customer-first focus has paid dividends; Azure currently boasts over 214 million subscribers who pay roughly $99 a year and includes notable clients such as ExxonMobil, Starbucks and Walmart as customers. Microsoft is using this strategy to focus on customer needs and satisfaction rather than revenue growth – leading the company to rank highly on Kantar BrandZ’s Most Valuable Global Brands list.
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