Microsoft and Apple have a rivalry that goes back decades, so Cupertino likely felt pretty smug when it became the first US company to reach a $2 trillion market cap last year. But the Windows maker has now joined its competitor in this very exclusive club by becoming the second US public company to hit a $2 trillion market value.
Microsoft’s shares rose 1.2% on Tuesday, pushing its market cap past $2 trillion. The only company other than Apple to hold a value this high was Saudi Aramco, the world’s biggest oil firm, which passed the milestone briefly in December 2019 but currently has a market value of $1.9 trillion.
Like many tech giants, Microsoft has seen its bottom line improve throughout the pandemic. The company beat expectations and experienced its largest revenue growth since 2018 during the last quarter—$41.7 billion—while its $15.5 billion profit was up 44%. The shares are up almost 20% this year, outperforming Apple and Amazon.
As noted by Bloomberg, it took Microsoft 33 years from its IPO to reach its first $1 trillion valuation in 2019, but hitting $2 trillion took around two years, thanks in no small amount to the Covid-19 effect and the massive growth of its cloud business.
“Microsoft checks all the boxes: it is in the markets that investors favor, it offers strong and sustainable growth, and it remains very well positioned to capitalize on the long-term secular trends we see in technology,” Logan Purk, an analyst at Edward Jones, told Bloomberg. A $2 trillion valuation “is warranted, given how it has pivoted toward the cloud, and it remains attractively valued even given the strong performance.”