Microsoft Inc’s (NASDAQ:MSFT) market value passed US$2trn overnight as the software giant’s renaissance continued.
Only Apple Inc (NASDAQ:AAPL) has achieved a similar valuation among the US tech giants and analysts believe Seattle-based Microsoft has the potential to catch up.
Microsoft’s cloud-based operation is the driver behind its rising value and experts argue the growth of home working during the pandemic will only accelerate its expansion.
Dan Ives at Wedbush Securities said in a note that orders are increasing in value while only a third of customers have so far shifted to the cloud.
“With workforces expected to have a heavy remote focus, we believe the cloud shift is just beginning to take its next stage of growth globally,” he said.
Amazon Web Services, Microsoft and Google dominate the cloud market and Wedbush expects total global spending will approach US$1trn over the next decade.
Microsoft has been on a tear since it refocused on its cloud-based services, with the share price up by more than 430% over the past five years having previously been in decline since 2000
Wedbush added: “While many tech stocks overall are all being lumped together as part of the WFH trade, we believe the growth story at MSFT is not slowing down as more enterprises/governments head down this cloud path over the coming years.
The broker raised its price target to US$325 from $310 to $325.
Shares rose by 1.1% to US$265.51 yesterday giving the business market cap of US$2trn and are expected to rise again when US markets open today.