Microsoft Races To The Top, Hits $3-Trillion Valuation, Challenges Apple's Throne

Microsoft Corp. MSFT achieved a $3 trillion market valuation on Jan. 24, 2023, fueled by the burgeoning optimism in artificial intelligence (AI), marking a significant milestone in its journey.

On Wednesday, Microsoft’s shares soared by 1.4% to $404, briefly propelling the company beyond the coveted $3 trillion mark and placing it in close competition with Apple Inc. AAPL for the title of the world’s most valuable company.

Microsoft’s Stellar Performance: A Closer Look

• Market Valuation: Microsoft briefly outpaced Apple, the first company to reach a $3 trillion market cap, before settling back.
• Yearly Growth: The company has seen an impressive 67% growth over the past year, matching its 2009 performance.
• AI and Growth: Investors are particularly enthused by Microsoft’s prospects in AI, especially through its partnership with OpenAI Inc. AI-powered services are expected to drive significant growth in earnings and revenue.
• Financial Outlook: Analysts forecast a revenue of $243.16 billion in 2024, a 14.7% year-on-year increase. Earnings per share (EPS) are predicted to reach 11.2, marking a 14.3% rise. The forward price-to-earnings ratio stands at 36x, close to its record high of 36.8x in November 2021.
• Cash Reserves: Microsoft boasts a substantial cash reserve of $143.94 billion.

Exchange Traded Funds Exposed To Microsoft

Microsoft is a core holding in 513 ETFs, with U.S.-based ETFs owning 13% of Microsoft’s outstanding shares.

Microsoft holds a staggering 22% weight in the Technology Select Sector SPDR Fund XLK.

The tech giant has a substantial 21% stake in the Fidelity MSCI Information Technology Index ETF FTEC and a 20% weight in the iShares Global Tech ETF IXN.

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