Microsoft has officially become the third company to reach a market valuation of $1 trillion, following the trail of Amazon and Apple.
The investing landscape is turning towards big tech stocks again. After a precipitous decline last year, 2019 has been a rally for the broad market. It’s not only Microsoft — Apple and Amazon rose 30 percent and 27 percent respectively this year.
Facebook, Netflix, and Alphabet are also experiencing a significant surge in their stock prices in 2019.
The 2018 decline was led by concerns over a stock market crash. The primary concerns last year revolved around whether or not tech companies could keep adding users and generating sales in a slowing global economy. As 2019 has proved, it seems as though they can. With these concerns now starting to fade, tech shares are booming yet again.
Microsoft’s temporary achievement of a $1T market capitalization is primarily due to its transformation into a cloud computing giant.
For a long time, Microsoft was associated primarily with personal computers. They licensed the Windows platform and other relevant software, generating revenue in this way. However, Microsoft has, in the past 5 years, transformed itself into the leader of cloud computing technology. Its subscription-based business model has also proven to be extremely profitable.
Called Microsoft Azure, the tech giant’s cloud computing platform rivals Amazon. It has grown to become the industry’s largest in the past year.
However, Microsoft is nonetheless still looking ahead with a newfound focus not just on cloud computing, but also on artificial intelligence (AI). Microsoft’s research on AI is closely related to another emerging technology that it’s secretly working on — blockchain technology.
As part of Microsoft Azure, users can already develop, test, and deploy ‘secure blockchain apps’ through the Microsoft platform. Microsoft has been offering this service since 2018 and believes that their cloud computing service will someday perhaps even transition into such a decentralized model.
Although the big tech stocks are booming in 2019, there’s still the question of whether they will be able to keep up with the changing technological times. As blockchain and AI grow to become staples in the digital economy, we may begin to see some new players among the largest tech companies—and perhaps even some high-profile losers.
Do you believe the tech giants are due for a massive shake-up in the coming years? Let us know your thoughts in the comments below.
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