Microsoft exceeds $3tn market cap on strong investor confidence

Company's shares have gained close to 10% since the start of the year

Microsoft has announced the addition of a new Copilot key on the Windows keyboard in a move aimed at supporting the adoption of AI in its hardware products. Bloomberg

Microsoft's market capitalisation passed $3 trillion in intraday trading on Wednesday as the stock experienced a more than 1 per cent increase, reaching about $404 per share.

This milestone occurred nearly two weeks after Microsoft surpassed Apple to become the world's most valuable public company on January 12.

However, Apple has since reclaimed the top position, with its market capitalisation reaching about $3.03 trillion on Wednesday.

Microsoft's shares have gained nearly 9.2 per cent since the start of the year, reflecting investors’ optimism regarding the company's strategic investments in artificial intelligence. The stock has gained almost 67.3 per cent in the past 12 months.

“The transformative leadership of [Microsoft chief executive] Satya Nadella has been nothing short of extraordinary, as evidenced by the company’s impressive surge in stock value over the last decade,” Stocklytics financial analyst Edith Reads said.

Satya Nadella, chief executive of Microsoft. AFP

“This success is a testament to Nadella’s strategic vision and ability to navigate challenges. This is seen in the revitalisation of Microsoft’s core business and the emergence of the intelligent cloud business as a revenue powerhouse.”

Earlier this month, the Redmond, Washington-headquartered technology company announced the addition of a new Copilot key on the Windows keyboard in a move aimed at supporting the adoption of AI in its hardware products.

The key, which will be available in laptops and personal computers manufactured by Microsoft and its partners, will grant users immediate access to the AI-driven Windows Copilot experience, the company said.

The new key will activate the integrated Windows Copilot within Windows 11, presenting a ChatGPT-like chatbot capable of responding to inquiries and carrying out actions. The company said it aims to make 2024 “the year of the AI PC”, commencing with the latest alteration.

Microsoft’s stock was trading more than 1.5 per cent up at $404.71 at 12.40pm New York time. Its market valuation stood at $3.01 trillion.

Morgan Stanley analysts said Microsoft’s positioning and contributions related to generative AI are “getting even stronger”, according to a note on Tuesday, CNBC reported.

They have elevated their price target to $450 from $415 and said they “remain confident in upside to our above consensus estimates”.

In the September quarter, the company reported a 27 per cent increase in its net profit, beating Wall Street’s revenue estimates. Its net profit jumped to $22.3 billion in the three months to the end of September. Its revenue during the period jumped 13 per cent to $56.5 billion, exceeding analysts' expectations of $54.5 billion.

Microsoft is expected to announce its last quarter’s earnings on January 30.