Analyst sees Microsoft becoming the first trillion dollar company

Analyst sees Microsoft becoming the first trillion dollar company
Back in February 2015, the market capitalization of Apple (share price multiplied by number of shares outstanding) surpassed $710 billion. At that point, Apple was the first company in history to be valued at over $700 billion. The tech titan eventually peaked at $775 billion before slipping back to the current value of $617 billion.

Even though it currently is in third place after Apple and Alphabet, Microsoft will be the first company to have a valuation in excess of one trillion dollars according to analyst Michael Markowski. The current valuation of the top five publicly traded tech firms includes:

  • Apple $617 billion
  • Alphabet $548 billion
  • Microsoft $492 billion
  • Amazon $359 billion
  • Facebook $333 billion

Microsoft has a better chance of reaching the trillion dollar mark than Apple does, says Markowski, because a software company like Microsoft is more scalable and can reach more people than a hardware company like Apple. The analyst also says that the acquisition of LinkedIn helped raise Microsoft's valuation because social media earnings are valued higher. And Microsoft paid only $60 for each LinkedIn subscriber, who tends to be a professional with a higher paying job than the typical social media user. Facebook paid $218 on average for each of its social media users.

To get to $1 trillion in valuation, Microsoft will have to double its stock price. It should benefit from a hike in LinkedIn subscribers to 700 million by 2020 from the current 433 million. The only competition that Microsoft has in the race to $1 trillion in value is Alphabet, according to Markowitz. The analyst doesn't expect Apple to be involved in what he sees as a two company race.

source: via

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