For the first time in three years, Microsoft has surpassed Google (Alphabet) in market valuation. The value of the company is at $753 billion, while Alphabet Inc is valued at $739 billion. With this new position in market value, Microsoft becomes the third most valuable company in the world, trailing behind Apple and Amazon.
The first time Google beat Microsoft was back in 2012; since then both the companies have traded positions quite a few times in recent years. However, this latest improvement in the valuation of Microsoft goes to show the growth in the company’s stock price in the last five years since former CEO Steve Ballmer announced his retirement at Microsoft.
Also since the time Satya Nadella took over Microsoft four years ago, the company’s stock price has doubled. Nadella has brought the focus back on cross-platform technologies, the cloud, artificial intelligence, and is looking forward to protecting the future of quantum computing and mixed reality headsets. Under Nadella’s leadership, Microsoft has gotten over the idea of having Windows as the core of everything that it offers.
Microsoft and Google have been in direct competition in quite a lot of businesses related to cutting-edge technology such as artificial intelligence, speech recognition, and cloud computing.
In this race to be the first US company to achieve the trillion dollar market cap, Apple and Amazon are leading so far with Apple being in the number 1 position with a market valuation of $923 billion, and Amazon at number 2 with a $782 billion market cap. Microsoft generates revenue from a diverse range of businesses, while Google’s 90% revenue is mainly from advertising and iPhone is behind 60 percent of Apple’s entire income.
Over the years, Microsoft’s legacy hardware business lost its momentum due to inroads made by Apple and Google. However, the company regained it back after it shifted to focus on cloud services.
“While Amazon is the clear leader on the public cloud front, Microsoft, thanks largely to its legacy server business, is the best equipped to meet the needs of those companies seeking to combine the benefits on-site data centers,” Action Alerts PLUS portfolio manager Jim Cramer wrote in a recent note.