If you ask Morgan Stanley how Microsoft is performing, they would say the company is doing nearly everything right, as they have just predicted the company will hit a trillion dollar valuation within the next 12 months, a year earlier than the rather optimistic 2017 prediction by Evercore ISI, which said the company will hit the landmark in 2020.
“Strong positioning for ramping public cloud adoption, large distribution channels and installed customer base, and improving margins support a path to $50 billion in EBIT and a $1 trillion market cap for MSFT,” wrote Morgan Stanley’s Keith Weiss in a note to clients Monday.
The prediction boosted Microsoft’s share price by more than 7.5%, hitting a share price of $93.78 and a market cap of $722.09 billion.
Morgan Stanley raised his price target for Microsoft to $130 from $110, as the analysts believed Microsoft will take a large segment of the $250 billion public cloud market, boosted in part by its assets such as Microsoft analytics, machine learning and front office apps.
Analysts have been largely positive towards the company in recent months, with 14 positive revisions to the company’s full-year earnings estimates.
Earlier in the year, Thomson Reuters crowned Microsoft the world’s top 100 leading technology company based on performance across eight pillars: Financial, Management and Investor Confidence, Risk and Resilience, Legal Compliance, Innovation, People and Social Responsibility, Environmental Impact, and Reputation. Canaccord Genuity Group Inc. also predicted Microsoft’s market cap will appreciate by 10-20% every year, hitting a market capitalisation of $1 trillion by 2019, on the strength of its Office and Cloud offerings.
Read more about these latest predictions at BusinessInsider here.