Riding the wave of computing demands during the pandemic, Microsoft became the second company in the U.S.to reach the $2 trillion market cap on Tuesday, June 22. Apple Inc. was the only US company to have reached this milestone. Oil major Saudi Aramco had reached this valuation in December 2019 but its valuation has dropped since.
Redmond, Washington-based Microsoft was founded in 1975 by Harvard dropout Bill Gates and Paul Allen. Over the years, its flagship product, Windows operating system has been synonymous with Personal Computing (PC) devices and Office software. It took the company 33 years to reach the $1 trillion market valuation in 2019. But the company added another trillion in just two years.
Lockdowns and remote working during the COVID-19 pandemic made heavy contributions to this rally. Microsoft’s stock value has risen 64 percent since March 2020. Restrictions during the pandemic have meant that people are at home but have spent increasing amounts of time on devices for work, study, entertainment and even connecting with friends and family. Market valuations of other tech companies like Amazon and Google have also rallied during this period and are not very far from the $2 trillion mark.
But, Microsoft’s story is quite the story of the underdog. Facing antitrust lawsuits in the late nineties, Microsoft missed the bus of mobile software, social media, and even internet search, falling far behind startups like Google and Facebook. A change of guard in 2014 brought Satya Nadella into the driver’s seat and the company made large strategy changes, shifting the company’s focus to cloud computing and artificial intelligence.
As countries began locking down, demand for Microsoft’s cloud-based services and applications grew and is still on the rise. Sales were up 19 percent year on year for the period of January to March 2021. As people return to physical offices, Microsoft is pushing innovative solutions to improve the work-life balance and wellness of its clients’ employees. As CEO Satya Nadella noted at the Build Tech Conference last month, Microsoft will soon share the most significant Windows update of the decade. Recently, Nadella’s handling of the company also earned him a unanimous election as the Chairman of the company.
Speaking of the company’s prospects, Hilary Frisch, senior research analyst at Clearbridge Investments told Bloomberg, “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.”