Microsoft reached a market valuation of $3 trillion on Wednesday (Jan. 24), consolidating its position as one of the largest public stocks.
The tech giant’s stock rose by 1.6% to $405.13, Bloomberg reported Wednesday.
Although Microsoft briefly surpassed Apple, the first company to reach the $3 trillion mark, it has since traded places with the iPhone maker, according to the report.
Apple became the first U.S. company to hit a market capitalization of $3 trillion on Jan. 3, 2022 — that year’s first day of trading — after tripling its valuation in less than four years. At the time, Microsoft was worth about $2.5 trillion.
Microsoft’s achievement of the $3 trillion milestone not only highlights its success but also underscores investors’ growing optimism surrounding artificial intelligence (AI), the Bloomberg report said.
The company owes its gains in part to its partnership with OpenAI, which has helped the company release AI-supported services to its customers, per the report.
The demand for AI services, combined with cloud computing, is projected to drive Microsoft’s long-term growth, the report said. The company’s revenue is expected to rise by 15% in its 2024 fiscal year, outpacing the overall tech sector, according to Bloomberg Intelligence data.
The market’s enthusiasm for AI and its potential to accelerate earnings and revenue growth has made Microsoft one of the most sought-after stocks on Wall Street, per the report. Over 90% of the analysts tracked by Bloomberg recommend buying shares, with an average price target suggesting a 7% upside from current levels.
Microsoft announced in May that it would launch AI integrations across its full Windows 11 platform, including the firm’s most important software products.
With the preview of the addition of this AI integration called Windows Copilot, Windows 11 became the first PC platform to announce centralized AI assistance across its suite of both consumer and enterprise products.
In November, Microsoft began selling its Microsoft 365 Copilot AI for its Office app business subscribers after launching a commercial version in September.
With the feature costing $30 per person each month, the company could see more than $10 billion in annualized revenue by 2026, CNBC reported at the time, citing work by Piper Sandler analysts Brent Bracelin and Hannah Rudoff.