Microsoft Joins Apple In The $2T Valuation Club

Microsoft Corporation (NASDAQ: MSFT) joined Apple Inc (NASDAQ: AAPL) as the second U.S. company to achieve a $2 trillion valuation on Tuesday.

What Happened: Microsoft shares touched an intraday high of $265.79 in Tuesday’s trading giving the company a valuation slightly above $2 trillion.

In August last year, Apple’s market cap rose beyond the $2 trillion mark. At the time, some analysts said that the Tim Cook-led tech giant is on its way to the $3 trillion level.

Cloud has been a key driver in the recent spurt of growth for Microsoft, with total revenue from that segment hitting $17.7 billion in the third quarter, which translates into a growth of 33% year-over-year.

As per Q3 results, the company’s intelligent cloud segment revenue stood at $15.1 billion, a growth of 23% year-over-year.

Microsoft also saw robust growth in its cloud service revenue which shot up 26% year-over-year buoyed by Azure revenue which shot up 50% year-over-year. 

Why It Matters: Year-to-date returns on Microsoft shares have eclipsed other tech giants such as cloud rival Amazon.com, Inc (NASDAQ: AMZN) and even Apple. 

MSFT shares have spiked 19.4% since 2021 began, while Amazon and Apple shares rose 7.6% and 1%, respectively. 

See Also: From Amazon Towards Microsoft — Why 'Tide Is Shifting In The Cloud Arms Race'

"Another solid quarter across Microsoft's major lines of business underscores powerful DX tailwinds and solid execution in place across key components of the Microsoft cloud,” said Bank of America analyst Brad Sills, post the company’s Q3 results.

Price Action: On Tuesday, Microsoft shares closed 1.1% higher at $265.51 in the regular session and gained another almost 0.2% in the after-hours trading.

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