Microsoft achieved a remarkable feat on Wednesday, becoming the second company ever to surpass a valuation of $3 trillion (£2.4 trillion). This significant milestone was propelled by the company’s unwavering focus on artificial intelligence (AI), which spurred a rally among investors.
This achievement follows in the footsteps of Apple, which attained the $3 trillion milestone in June of the previous year. During Wednesday’s trading session in New York, Microsoft’s shares experienced a notable increase of more than 1.45%, coinciding with the day when America’s benchmark S&P 500 index reached a record high.
Renowned as one of the “magnificent seven” technology companies driving the growth of US stock indexes, Microsoft has strategically integrated AI features into its services. The company has emerged as the primary investor in the prominent AI startup, OpenAI, responsible for the ChatGPT chatbot, with a substantial investment of $10 billion (£7.9 billion) at the beginning of the previous year. This collaboration positioned Microsoft as a leader in AI, surpassing competitors like Google and Meta, the owner of Facebook.
In subsequent developments, Microsoft introduced a series of AI-related innovations to its core products. Notably, an AI digital assistant named Copilot was added to both its Edge web browser and Office software. Additionally, an AI chatbot was integrated into its Bing search engine last February in a bid to compete with Google. However, despite these efforts, independent analyses suggest that Microsoft has encountered challenges in expanding its market share.
As the second-largest provider of cloud computing services, Microsoft has intensified its competition with Amazon and Google by developing its own AI-supporting chips. This strategic move is aimed at leading the charge in providing artificial intelligence tools for businesses.
Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown, expressed enthusiasm about Microsoft’s position in the stock market. She highlighted the growing excitement surrounding the company’s AI tools, expansive cloud products, and continued acknowledgment for its robust software foundation. Nevertheless, Lund-Yates cautioned that a portion of Microsoft’s revenue is linked to new computer sales, an area where the company has faced some challenges.
Founded in 1975, Microsoft emerged as the dominant player in software during the 1980s and 1990s, securing its position as an industry standard through a pivotal deal with IBM. Despite facing increased competition in the 21st century, including challenges from web-based software and rival operating systems from Google and Apple, Microsoft has consistently adapted.
In the ongoing battle for the title of the world’s most valuable company, Microsoft shares have been closely contending with Apple’s since the start of the year. Earlier this month, Microsoft briefly claimed the top spot, underscoring the dynamic nature of the market.