Microsoft Corporation has once again become the most valuable company in the U.S. The software giant’s market cap has crossed $2.49 trillion and crossed Apple Inc. for the first time since July 2020.
The company’s earnings report was another reason why its stocks grew this week. On the other hand, Apple announced that supply-chain challenges are responsible for impacting product manufacturing. Besides, these issues are likely to heighten during the holiday season in the last quarter.
July 2020 was the last time Microsoft had a higher market cap than Apple.
Has remote working and schooling fueled Microsoft’s recent growth?
Tech companies such as Microsoft and alike have largely benefited from the increasing shift to work from home and remote schooling during the pandemic. Microsoft’s increasing focus on cloud computing has become a key driver to the firm’s bottom line.
Today, Microsoft has around 20% share in the global cloud computing market according to Gartner. This makes it the second-largest company in the world, following the trails of Amazon.com Inc, which enjoys a market share of 40%.
The last time Microsoft had an extended run as the world’s most valuable tech company was in the early 2000s. At that point, Microsoft’s business consisted of a full suite of Office applications and Windows Operating systems.
As mentioned earlier, cloud computing business and Office productivity software subscriptions were the main revenue-generating streams. These two streams have remained very important to investors.
In addition, Microsoft has done an amazing job of binding together its ecosystem to create lock-in. This strategy is very similar to that deployed by Apple on the iPhone. While iMessages, music subscriptions, and iCloud are revenue drivers for Apple, Azure, Microsoft Teams, Power BI, and Word have been that for Microsoft.
Microsoft’s growth can be attributed to the leadership of its current CEO, Satya Nadella. Microsoft’s market cap crossed $2 trillion in June 2021 after it surpassed the $1 trillion mark in April 2019.
At present, Apple and Microsoft are the only companies with market caps of more than $2 trillion.