Microsoft became the second-ever company worth $3 trillion on Wednesday as the artificial intelligence boom sent shares of the company’s stock soaring higher.
For comparison, Microsoft’s market value is now larger than the entire GDP of France and just behind that of the United Kingdom.
The stock rose by nearly 1.5% to about $405 per share on Wednesday afternoon, exceeding a $3 trillion market capitalization and joining Apple as the only other company to have reached the historic milestone.
Shares of Microsoft are up more than 7% year to date after jumping about 40% last year, largely due to investor enthusiasm in AI and its potential to create growth for the company.
In 2023, the company’s CEO, Satya Nadella, made a multibillion-dollar Investment in AI, including commercializing and adding AI tools like ChatGPT into its suite of products before rivals.
He even strengthened Microsoft’s ties to ChatGPT maker OpenAI, a major pioneer in the field of artificial intelligence, during a board and leadership upheaval at the smaller company late last year.
After trailing behind Apple for the majority of the past decade, Microsoft surpassed the company to briefly become the world’s most valuable publicly traded company earlier in January.
Microsoft is part of the so-called “Magnificent 7,” a group of stocks including Apple, Nvidia, Amazon, Alphabet, Meta and Tesla that have almost single-handedly boosted markets to new highs in recent weeks.
Microsoft alone makes up 7.3% of the S&P 500. Together, these seven stocks have a market cap larger than any country’s entire stock market except for the United States.
As of last week, Nvidia and Microsoft alone accounted for about 75% of the S&P 500’s gain this year, according to analysts at Bespoke Investment Group.
In a note on Tuesday, Morgan Stanley analysts said they see Microsoft’s play for AI “getting even stronger,” and moved their price target for the stock to $450 from $415. Bank of America analysts also moved their target to $450 per share, predicting more growth for the Washington-based company this quarter.
Microsoft reports its fourth-quarter earnings on January 30.
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