On Thursday, Microsoft became the second US company after Nvidia to exceed the symbolic $4 trillion mark in terms of market capitalization, following the publication of quarterly results that were applauded by the financial community.
The world's leading software company's share price set a new record this morning, rising above $555.4, putting its market value at just over $4.02 trillion.
The Redmond, Washington-based technology giant reported better-than-expected results for Q4 ended 30 June, thanks to the strength of its Azure cloud platform and its AI offerings.
The group reported a 24% increase in net profit to $27.2bn, or $3.65 per share, compared with analysts' expectations of $3.35.
Revenue rose 18% to $76.4bn, also exceeding the consensus of $73.7bn.
Azure's growth accelerated to 39%, beating even the most optimistic analysts' forecasts of around 35%.
However, Microsoft does not provide specific figures for its AI services, but analysts estimate that its Copilot tool was largely responsible for the 16% growth recorded by its Microsoft 365 office suite.
This strong performance has led many brokers to raise their price targets, such as the BofA teams, which have raised theirs from $515 to $640 today. Jefferies has raised its target from $600 to $675, while Mizuho now says it is targeting $625, up from $540, as is Wedbush.
Amongst tech heavyweights, Apple is closest to Microsoft with a market capitalization of just over $3.1 trillion, while Amazon remains "stuck" at around $2.4 trillion on the stockmarket ahead of the release of its quarterly results, due out this evening.
Microsoft Corporation is the world's leader in the design, development and marketing of operating systems and software programs for PC's and servers. The group also builds and sells computer equipment. Net sales break down by activity as follows:
- sale of operating systems and application development tools (42.9%): primarily for servers (Azure, SQL Server, Windows Server, Visual Studio, System Center, GitHub, etc.) and (Windows);
- development of cloud-based software applications (37.7%): programs for productivity (Microsoft 365; Word, Excel, PowerPoint, Outlook, OneNote, Publisher and Access), integrated management and customer relationship management (Dynamics 365), online file sharing and management (OneDrive), and unified and collaborative communications (Microsoft Teams);
- other (19.4%): primarily sale of software licenses (Windows), tablets (Microsoft Surface), video game consoles and software (Xbox), computer accessories, etc.
The United States accounts for 51.3% of net sales.
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