Microsoft Corp. becomes the second U.S. public company to reach a $2 trillion market value. Its dominance in cloud computing and enterprise software will expand more in a post-coronavirus world.
Its shares rose as much as 1.2% in New York on Tuesday, enough for the software company to briefly join Apple Inc. as one of only two companies trading at such a high value.
Chief Executive Officer Satya Nadella has reshaped the company into the largest seller of cloud-computing software, counting both its infrastructure and Office application cloud units.
Microsoft has gained 19% this year, outperforming Apple and Amazon.com Inc., as investors piled into the stock on long-term growth expectations for both earnings and revenue and expansion in areas like machine learning and cloud computing. The company’s third-quarter results, released in late April, topped expectations and demonstrated strong growth across its business segments.
More than 90% of analysts recommend buying Microsoft, while none has the equivalent of a sell rating on the stock. The average price target points to an upside of about 11% from current levels.
Microsoft’s cloud-computing business has been a central force behind the advance. The Intelligent Cloud business accounted for 33.8% of Microsoft’s 2020 revenue, making it the largest of the three major segments for the first time, and up from 31% in 2019. The division showed revenue growth of 24% last year, compared with the 13% growth in Productivity and Business Processes and the 6% growth of Microsoft’s More Personal Computing unit.
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