Microsoft has become the next $4 trillion company

Egypt Independent

4 days ago

Microsoft became the second company to reach a $4 trillion market valuation on Thursday, after its blockbuster earnings report on Wednesday night boosted the tech giant's shares.
Microsoft's shares (MSFT) jumped nearly 4.5 percent after the market opened on Thursday, pushing its intraday valuation to $4.01 trillion. The company's shares have risen roughly 28 percent since the start of this year.
The milestone comes just a year and a half after Microsoft reached a $3 trillion valuation. The company first cracked the $1 trillion mark in April 2019. It follows Nvidia into the $4 trillion valuation club, which hit the mark earlier this month.
Microsoft forecast a record $30 billion in capital spending for the current fiscal first quarter to fuel its AI ambitions, and reported booming sales in its Azure cloud computing business on Wednesday. Wall Street analysts also noted that Microsoft's Copilot AI chatbot appears to have driven meaningful growth in its Microsoft 365 enterprise software business.
Microsoft's move to $3 trillion was more measured than other tech giants, Nvidia (NVDA) and Apple (AAPL), with AI bellwether Nvidia tripling its value in just about a year and clinching the $4 trillion milestone before any other company on July 9. Apple was last valued at $3.12 trillion.
Lately, breakthroughs in trade talks between the US and its trading partners ahead of President Donald Trump's August 1 tariff deadline have buoyed stocks, propelling the S&P 500 and the Nasdaq to record highs.
Microsoft, the second largest US company, has rebounded nearly 50 percent from its April 2025 lows, when global markets were rattled by Trump's tariff offensive.
Microsoft's multibillion-dollar bet on OpenAI is proving to be a game-changer, powering its Office Suite and Azure offerings with cutting-edge AI and fueling the stock to more than double its value since ChatGPT's late-2022 debut.
Armed with exclusive access to OpenAI's models, Microsoft has raced to the front of the generative AI pack — supercharging its Azure cloud business, now the company's top revenue driver, and solidifying its dominance in the tech landscape, compared to Google's cloud and Amazon's web services.
Wall Street's surging confidence in the company comes on the heels of back-to-back record revenues for the tech giant since September 2022.
The stock's rally had also received an extra boost as the tech giant trimmed its workforce and doubled down on AI investments — determined to cement its lead as businesses everywhere race to harness the technology.
While sweeping US tariffs had investors bracing for tighter business spending, Microsoft's strong earnings have shown that the company's books are yet to take a hit from the levies.
But despite its meteoric rise, Microsoft has been streamlining its workforce in recent months. The company said earlier this month that it would cut around 9,000 employees, approximately 4 percent of its staff, its largest reduction since 2023. Those layoffs came after the company cut 6,000 workers in May.
A company spokesperson said the July cuts were, in part, a reflection of new technologies that have made employees more productive. While AI wasn't mentioned specifically, the cuts came as Silicon Valley giants deploy the technology they're building to make their workers more efficient. Microsoft CEO Satya Nadella said earlier this year that 20 percent to 30 percent of the company's code was being generated by AI, and it's is pouring billions into AI infrastructure investments.