$1 Trillion

Posted on April 25, 2019 by Paul Thurrott in Microsoft with 11 Comments

Microsoft’s market capitalization briefly hit $1 trillion late Wednesday, thanks to the firm’s better-than-expected quarterly results. This marks the third time a U.S. tech giant has hit the financial milestone in the past year.

Microsoft’s net income and revenues for the quarter ending March 31 both beat expectations. As you may recall, Microsoft earned a net income of $8.8 billion on revenues of $30.6 billion. Those results sent Microsoft’s stock soaring, at least temporarily, past $130.50 per share. And that, in turn, increased the firm’s market cap to over $1 trillion.

Microsoft isn’t the first U.S. tech firm to hit a $1 trillion market cap, of course.

Apple was first to this milestone in August 2018 when it briefly became the first-ever publicly traded U.S company to be worth $1 trillion. Interestingly, that record was tied to ongoing, at the time, record iPhone sales. Since then, of course, Apple’s iPhone business has begun declining at an alarming rate, leading the consumer electronics giant to focus more on services this year.

Two months later, e-retailer Amazon.com hit the $1 trillion valuation mark.

And now we have Microsoft. Or, we did: The software giant’s market cap has dropped to about $960 billion at the time of this writing as excitement around what was really just a fairly normal quarter for the company finally died down.

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Comments (11)

11 responses to “$1 Trillion”

  1. the_real_entheos

    When MS made cool consumer products, I would have cheered this on. But since they are well on their way to becoming the next IBM, I couldn't care less. This will just spur-on the axing of interesting products that don't have immediate profits. And anything relevant to consumers. The only reason I stick with Windows is that the Mac is so expensive (and has crappy keyboards).

    • bart

      In reply to the_real_entheos:

      You think the shareholders give two bits about your desire for consumer products with a share price that was going nowhere?

      Don't get me wrong, I am in your camp and would love to see cool consumer products. But from a financial point of view NAdella has done (mostly) right

      • SenorGravy

        In reply to Bart: That isn't OP's point. His point is that this new Microsoft doesn't matter to him, or make products for him. So what does he care what happens to them? It's kinda like Blackberry. Like Nadella, they toast John Chen for saving the company. But did he really save it if BlackBerry no longer makes smartphones and BlackBerry OS? What does it matter to BlackBerry die hards that the company survives if if isn't BlackBerry anymore? Similar to Microsoft. I don't care if Microsoft thrives if they only make Enterprise products. And I would imagine a lot of Thurrott subscribers feel the same way. I have a drawer full of cool Microsoft products that they don't make anymore. There are really good reasons why they don't, but it doesn't change the fact that OP (and me) aren't as interested in Microsoft as a result.


  2. dcdevito

    Unlike Apple, Microsoft isn’t a one trick pony. And to make it even nuttier is to think how much growth potential their services and Azure has. When iPhone sneezes Apple gets pneumonia

  3. locust infested orchard inc

    Quote by Paul Thurrott, "And now we have Microsoft. Or, we did: The software giant's market cap has dropped to about $960 billion at the time of writing as excitement around what was really just a fairly normal quarter for the company finally died down."


    BREAKING NEWS:

    Reported by Reuters on Thursday, 25th April at 14:50 GMT (22 minutes ago at the time of writing):


    "Microsoft Corp’s market value vaulted above the $1 trillion mark for the first time in regular session trade on Thursday, pulling ahead of Apple Inc and making it the most valuable U.S. publicly traded company after quarterly earnings and revenue beat Wall Street expectations."


    Chart below depicts the market capitalisation of Apple, Amazon, and Microsoft, between May 2018 and today (25th April 2019). Chart courtesy of Reuters.


    View larger image by opening image in a new tab.



  4. MikeGalos

    As of 11:25 EDT the market capitalizations were


    Microsoft $994.63 Billion

    Apple 978.64 Billion

    Amazon 941.23 Billion

    Alphabet (Google) 877.76 Billion


    Obviously these will fluctuate during the trading day (and, during after hours trading which is what Paul was quoting in the article based on its publishing time and his talking about its trading on Wednesday since the announcement and run up were after close of trading on Wednesday) and it's likely that the MSFT stock price will fluctuate over and under the magic number that works out to the trillion dollar market capitalization value several times in today's trading alone.


  5. jules_wombat

    This Just shows that Satya is obviously doing something right, and that Microsoft move into Cloud and Enterprise services, with less emphasis on Windows and Consumer is actually the correct business strategy. Despite all the naysayers commenting here who do not understand how the cloud services represents the future for Microsoft.

    • Greg Green

      In reply to Jules_Wombat:

      The trouble with using market capitalization as a marker is that everything is great until it suddenly isn’t. GE is an extreme example, but 8 years ago the chairman sat in the President’s job creation task force. Last year they got kicked off the Dow, losing half their value in one year.


      Market cap is what the speculators think a company's worth, and they’re as susceptible to fan frenzy as board members are.

  6. locust infested orchard inc

    As reported by the BBC today:


    "While the $1tn milestone garners headlines, Microsoft executives have dismissed its importance in the past.


    'This is a metric that nobody on the senior leadership team is tracking,' Chris Capossela, Chief Marketing Officer at MSFT, said at an event in November 2018. 'Nobody is sitting around high-fiving when the stock hits some new high.'"


    Yeah right. Knowing corporate culture, they'll all be privately reeling with joy, enthused that their work and business decisions are having a hugely positive impact upon their employer's financial successes. They'll all be hoping to continue on this upward trajectory, bolstering the morale of all employees.


    Perhaps this positive force amongst the Microsofties may aid to speed up the release of WCOS, Centaurus, Andromeda, and the Surface Hub 2X, because there's nothing like a rush of naturally stimulated dopamine release in a global workforce of approximately 131,000, to hasten with skill and dedication, the completion of one's products.


    Go, go, go, Microsoft !!!

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