$2 Trillion

Posted on June 23, 2021 by Paul Thurrott in Microsoft with 16 Comments

Analysis: Microsoft Earnings

On Tuesday, Microsoft’s market capitalization hit $2 trillion for the first time. It’s the second U.S. corporation to achieve this milestone.

And perhaps not coincidentally, there were only two corporations with a $2+ trillion market cap as of the close of market yesterday, Apple—which first hit the $2 trillion market cap milestone almost one year earlier—and Microsoft. When I checked Microsoft’s market cap this morning, it sat right at $1.999 billion.

The reason for Microsoft’s rapid ascent is obvious enough: The COVID-19 pandemic has dramatically lifted the fortunes of most companies with hybrid work/learning solutions, and Microsoft has dug in hard on this “new normal.” Since the pandemic triggered shutdowns in the U.S. in mid-March 2020, the software giant’s stock price has surged nearly 60 percent.

The most interesting thing about Microsoft’s financial dominance is that it hasn’t triggered massive antitrust scrutiny. Big Tech companies like Amazon, Apple, Facebook, and Google, three of which are smaller than Microsoft, are in trouble on multiple continents and with numerous regulatory bodies, and each will face behavioral, if not structural, changes as a result.

But Microsoft? Almost complete silence.

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Comments (16)

16 responses to “$2 Trillion”

  1. mobispoke

    Paragraph beginning with "And perhaps not coincidentally" includes a reference to "$2+ billion" which I believe should be "$2+ trillion." Also, Microsoft's stock was in 135-165 range in March 2020. It was roughly $238 in March 2021 (possibly where the typo is from). Given the yesterday's closing of over $265 per share, that puts growth from March 2020 well in excess of 60%. Thanks for considering my suggested edits.

  2. crunchyfrog

    Microsoft has always been a large financial powerhouse but it really is amazing to see how far they have come since Ballmer was at the helm.

  3. lezmaka

    I'm guessing once governments are done with Apple and Google platforms, they'll set their sights on Playstation and Xbox platforms.

  4. codymesh

    Every large corporation should be subject to antitrust scrutiny. If Microsoft plans to ramp up data collection with windows 11, they ought to be reminded of where that puts them in the eyes of the law.

  5. beckoningeagle

    If they don't use their power to stifle competition they can be as big as they want.

  6. shark47

    Their shares dropped to $15 (I think market cap was around $200M) during the financial crisis. I wanted to buy some, but I was so skeptical about Ballmer’s leadership, I decided against it.

    • locust_infested_orchard_inc.

      During the financial crisis, $MSFT hit a ten-year low in Feb 2009 at about $16, but now it is currently hovering around the $265 mark. Had you heeded the advice of 'buy on the lows, sell on the highs', your investment in $MSFT today would have achieved a phenomenal 1550% growth in just 12⅓ years.

      I bet you kicking yourself really hard on Microsoft reaching the $2 trillion net worth milestone.

      But fret not. My advice is it's always a good time to buy $MSFT (as is to by $AAPL). But should you wish to a get more from your investment, wait for a dip (e.g, $MSFT was priced at about $239 in mid-May 2021).

  7. locust_infested_orchard_inc.

    During intratrading on Tuesday 22nd June, Microsoft joined the exclusive club in becoming the third company ever to surpass the lofty heights of having a market capitalisation of $2 trillion, joining Apple (currently $2.236 T) and Saudi Aramco (currently $1.882 T). ? ?

    At close of the trading day, $MSFT however slipped a few pennies short of having a market cap of $2 trillion, but currently in after hours trading, share price is rising with increased volume of trading flows, presumably with traders who have an affinity for all things Microsoft, Microsoft is once again surpassing this momentous milestone during intertrading.

    Ever since Satya Nadella took over the helm from Steve Balmer in Feb 2014 (and succeeding John Thompson only last week as chairman), his online critics have been relentless in hurling insults with denigrating remarks such as "Nutella", "nut case", "his head is stuck in the cloud" for his forward-looking vision of Microsoft.

    Early in his tenure, Satya swiftly wrote off the assets in 2015 from the poorly executed Nokia acquisition by his predecessor famed for the prance onstage and shouting "developers, developers, developers, developers, ..., developers, developers, developers, developers" at Microsoft's 25th anniversary celebrations in 2000. The Microsoft fanbois have had contempt for Satya ever since axing W10M (Windows 10 Mobile).

    Satya embraced Linux in 2014 by stating that "Microsoft ❤️ Linux", in contrast to his predecessor who castigated the open source OS as "Linux is a cancer".

    In both the first e-mail addressed to all Microsoft employees and press briefing in Feb/Mar 2014, Satya (who has been hounded for embracing a cloud-first approach by disgruntled Microsoft fanbois) made numerous references to Microsoft as pursuing a strategy of embracing the "mobile-first, cloud-first world".

    Seven years on from his initial vision for Microsoft during his stewardship, it is clearly evident Satya was absolutely correct in his assessment for a forward-looking Microsoft leading the charge of tomorrow's technology. He has done Microsoft proud, and most investors' portfolios include $MSFT as a solid stock for the enrichment of clients' wealth. Satya's naysayers have nothing by Nutella on their face. ?

    Under Satya's stewardship, notable acquisitions that have made Microsoft a $2 trillion business include:

    ➊ Mojang, best known for Minecraft

    ➋ Mobile e-mail app startup named Acompli that became integrated into Outlook Mobile

    ➌ N-trig whose specialism was stylus and pen input hardware and software, which became the impetus for the Surface Pen

    ➍ The company behind the exceptionally popular mobile to-do list app, Wunderlist, which became a revamped Microsoft To-Do

    ➎ The cloud security company, Adallom, specialising in securing enterprise SaaS application usage and protecting employees and digital assets from threats in real time, became the basis of Microsoft Cloud App Security (MCAS)

    ➏ The virtual keyboard company, SwiftKey

    ➐ LinkedIn (the antithesis to Fakebook)

    ➑ Hexadite, a company delivering agentless, automatic incident investigation and remediation solutions, to improve commercial Windows 10 customers to detect, investigate and respond to advanced attacks (e.g. zero-day attacks, ransomware and other cyberthreats) on networks with Windows Defender Advanced Threat Protection (WDATP)

    ➒ GitHub, the competitor to GitLab, the software development and version control platform

    ➓ Affirmed Networks which offers fully virtualized, cloud-native mobile network solutions enabling operators to simplify network operations, reduce costs and rapidly create and launch new revenue-generating services, extending cloud-based software defined networking into the world of 5G connectivity

    ⓫ Several video game studios, including inXile Entertainment, Obsidian Entertainment, ZeniMax Media

    ⓬ Nuance Communications which is a leader in speech synthesis and speech recognition used ubiquitously in the healthcare sector.

    It took Microsoft 33 years from its IPO (initial public offering) to reach its first $1 trillion in net worth on 25th April 2019; the second trillion took only shy of two years and two months.

    The two core pillars of Microsoft's bull narrative are Microsoft 365 and Azure cloud-computing business. With the Intelligent Cloud business having accounted for over a third of Microsoft's 2020 revenue, it became the largest of the three major segments for the first time, with a revenue growth of 24% from the previous year. In comparison, the Productivity and Business Processes division enjoyed a 13% growth, whilst Microsoft's More Personal Computing unit saw a paltry 6% growth.

    Looking to the future, who has the superior growth driver to reach $3 trillion - Apple or Microsoft (or possibly Amazon) ? My bet is on $MSFT. ???

  8. bdollerup

    Ahmmm.. Office 365 was started under Steve Ballmer as was Azure. Open-sourcing a lot of MS properties (such as. Net) was a Steve Ballmer decision. And to his credit, Satya is also using the "Developer, developer..." song....

  9. saint4eva

    There is always a reason Microsoft is doing exceptionally well. Lol