Microsoft becomes second US public company after Apple to join $2 trn club

Shares of software giant have gained 19% so far this year

Microsoft Corp took its place in the history books as just the second US public company to reach a $2 trillion market value, buoyed by bets its dominance in cloud computing and enterprise software will expand further in a post-coronavirus world.
 
Its shares rose as much as 1.2 per cent 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 lofty value before closing pennies short of the mark at $265.51. Saudi Aramco eclipsed that threshold briefly in December 2019, but currently has a market value of about $1.9 trillion.
 
Since taking the reins in 2014, Chief Executive Officer Satya Nadella has reshaped the Redmond, Washington-based company into the largest seller of cloud-computing software, counting both its infrastructure and Office application cloud units. Microsoft is also the only one of the biggest US technology companies that has so far evaded the recent wave of scrutiny from increasingly active American antitrust regulators, giving it a freer hand in both acquisitions and product expansion.
 
Microsoft has gained 19 per cent so far this year, outperforming Apple and Amazon.com Inc, as investors piled into the stock on expectations of long-term growth 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.
 
The tech-heavy Nasdaq 100 Index outperformed the S&P 500 Index on Tuesday after Federal Reserve Chair Jerome Powell reiterated his view that inflation will be short lived.

 
Both benchmarks extended gains after Powell’s comments with the Nasdaq 100 closing up 0.9 per cent and the S&P 500 up 0.5 per cent.
 
Microsoft “has its hands in a lot and it is doing it all well: gaming, cloud, automation, analytics, AI,” said Hilary Frisch, senior research analyst at Clearbridge Investments. “It is an attractively valued name within tech, and it should benefit from both the economy reopening as well as from a more pronounced shift toward the cloud.”
 
Co-founded in 1975 by Bill Gates and Paul Allen, Microsoft created the personal-computer software industry and dominated the market for PC operating systems and Office software for years. As internet browsers like Netscape grew in importance in the 1990s, Microsoft raced to introduce its own product that it bundled with Windows software. That led to a bruising antitrust lawsuit, filed in 1998 by the US government, with a federal judge finding the company guilty in 2000.