Microsoft Becomes Second Company Valued Over $4 Trillion After Strong Second Quarter Earnings
Microsoft valuation surged past $4 trillion after markets opened on Thursday after beating expectations for second-quarter revenue, becoming only the second company in history to hit the milestone since AI chip designer Nvidia broke the record just weeks earlier.
Microsoft and Nvidia’s market cap growth has started to outpace Apple, whose $3.1 billion valuation is still the third largest in the world despite worries from investors it is falling behind in artificial intelligence, Reuters reported.
Microsoft’s surge in valuation came after the legacy tech giant made moves over the last year to pivot to AI and cloud computing. The company also laid off 6,000 employees in May, about 3% of its staff. The company invested over $88 billion in data centers for cloud computing and AI services, like its Copilot assistant, The New York Times reported. But other major products, including its Microsoft 365 suite, Xbox gaming services, Windows equipment and devices, and the social networking site LinkedIn also posted revenue increases over the last quarter, the company said Wednesday.
Nvidia, formerly a small cap company focused on making graphics cards for gaming computers, began developing more advanced chips for more functions about 10 years ago, including data centers and cryptocurrency mining—positioning it to capitalize on the surge in demand for chips to power AI technologies. As a result, the chip designer’s share price has risen over 35,000% over the last decade, and made history as the first company to post a $4 trillion market capitalization earlier this month.
