Microsoft becomes the second company to hit $3 trillion market cap

Microsoft (MSFT) reached a historic milestone on Wednesday, becoming the second company in the world to achieve a market capitalization of $3 trillion. The software giant’s shares rose 1.1% to reach $403.28, giving it a valuation of $3 trillion.

The company’s stock has been on a tear since last year, gaining 66.45% and outperforming the S&P 500 index, which rose 21.80%. Microsoft has benefited from strong demand for its cloud computing, gaming, and productivity software products, as well as its diversified business model that spans both consumer and enterprise markets.

Microsoft’s growth has also been fueled by its strategic acquisitions, such as the $7.5 billion purchase of video game maker ZeniMax Media in March 2023, and the $19.7 billion deal to buy speech recognition company Nuance Communications in April 2023. The company has also invested heavily in research and development, spending $20.3 billion in fiscal year 2023, up 15% from the previous year.

Analysts are bullish on Microsoft’s prospects, with an average price target of $425. According to Bloomberg data, 37 analysts have a buy rating on the stock, while four have a hold rating and none have a sell rating.

Microsoft’s achievement of the $3 trillion mark comes less than two years after it became the second company to cross the $2 trillion threshold in June 2022, following Apple Inc. (AAPL). Apple, which is currently the most valuable company in the world, has a market cap of $3.02 trillion.