Microsoft Hits $3 Trillion Market Value, Showing Strength of AI

Last Updated on January 24, 2024 by SPN Editor

Microsoft Corp. marked a significant milestone on Wednesday as its market valuation reached a historic $3 trillion, showcasing the remarkable ascent of the software giant driven by the prevailing optimism surrounding artificial intelligence (AI).

The stock experienced a notable uptick of 1.3%, reaching $403.95, solidifying Microsoft’s position as one of the largest publicly traded companies. This achievement briefly propelled Microsoft ahead of Apple Inc. in terms of market value, a feat Apple accomplished last year by becoming the first company to hit the $3 trillion mark.

However, Microsoft’s valuation eventually dipped below that of Apple, and the two have been trading places since then. Based in Redmond, Washington, Microsoft is part of the select group known as the “Magnificent 7,” contributing significantly to the overall market advancement in 2023 with a remarkable gain of approximately 57%.

This positive momentum has carried into the current year, with a 7.4% increase, outperforming the Nasdaq 100 Index’s 4.6% gain. Microsoft’s weight in the S&P 500 Index stands at 7.3%. Investor enthusiasm surrounding AI and its potential to drive growth in earnings and revenue has been a key driver of Microsoft’s success.

The company, in collaboration with OpenAI Inc., is considered one of the major beneficiaries of AI, having introduced AI-supported services to its customers. The demand for AI services, coupled with the supporting infrastructure of cloud computing, is anticipated to contribute to Microsoft’s long-term growth trends.

Projections indicate a nearly 15% increase in revenue for the fiscal year 2024, surpassing the overall growth rate of the tech sector, as per data from Bloomberg Intelligence. This exceptional growth has positioned Microsoft as one of the most favored stocks on Wall Street.

Over 90% of analysts tracked by Bloomberg recommend buying Microsoft shares, with the average analyst price target suggesting an approximately 7% upside from current levels. Microsoft’s ongoing success reflects not only its market dominance but also its strategic positioning in the dynamic landscape of artificial intelligence and technology.

Microsoft in the field of AI

In a year marked by significant advancements, it has emerged as a leader in the field of Artificial Intelligence (AI). The tech giant’s achievements in 2023 and 2022 highlight its commitment to innovation and societal impact.

Emerging from the Lab: Groundbreaking AI Advances and Discoveries

Microsoft’s AI technology has made a leap from the lab to everyday use, delivering innovations that are transforming the way we live and work. The company’s AI-based services, including ChatGPT and AI Copilots, are assisting with complex tasks ranging from search to security. These groundbreaking services are the result of years of research by hundreds of world-class researchers at Microsoft.

AI for Good: Strengthening Foundations for Positive Societal Impact

The Company is not just developing AI; it’s also working on strengthening its foundations for positive societal impact. The company is focusing on improving model efficiency, performance, and capability. It’s also introducing new frameworks and prompting strategies to increase the usability of models, and implementing best practices that contribute to sustainable and responsible AI.

Accelerating Discovery: Using AI for Scientific Exploration

It is harnessing the power of AI and other advanced technologies to accelerate scientific exploration and discovery. This initiative underscores the company’s commitment to leveraging technology for the greater good.

Laying the Groundwork: Advancements in AI Foundations

In 2022, the Company made remarkable progress in foundational technologies. These advancements have not only advanced human knowledge but also opened up new possibilities to address some of society’s most challenging problems.

Delivering Value: Bringing New Capabilities to Customers

The significant advances in AI have enabled it to bring new capabilities to customers. These include products and services like GitHub Copilot, an AI pair programmer that can turn natural language prompts into code, and a preview of Microsoft Designer, a graphic design app.

Empowering the Future: The AI Skills Challenge

In a bid to foster AI skills, Microsoft launched the AI Skills Challenge in the UK. The initiative provides immersive AI training content curated across various products and services.