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Could Microsoft Exceed $750 Billion Market Capitalization Soon?

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Microsoft’s market cap might cross $750 billion threshold

Earlier in this series, we looked at the expected rise in Microsoft (MSFT) stock. Mark Murphy, an analyst with JPMorgan, has raised his price target for Microsoft stock to $87 from $78. According to Marketwatch, citing results of a survey that included 30 Microsoft partners, Murphy said the survey produced healthy results. Partners shared that Azure, Microsoft’s cloud computing platform, would, on its technical capability and adoption, move closer to Amazon’s (AMZN) AWS (Amazon Web Services). Amazon is the undisputed leader in the cloud space.

Microsoft currently has a market cap (capitalization) of $712 billion. If Microsoft’s fiscal 2Q18 results beat analysts’ expectations, the stock could rise and possibly cross $750 billion.

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Microsoft’s increasing momentum in the cloud space

Microsoft’s improving position in the cloud space indicates that the cloud could dominate and drive the company’s top line in fiscal 2Q18. Citing Brent Bracelin, a KeyBanc analyst, CNBC reported in mid-January that Amazon (AMZN) lost market share in 4Q17 in the public cloud space. Amazon’s AWS had a 62% market share in 4Q17 compared to 68% in 4Q16. However, Amazon continues to dominate the overall cloud space. In comparison, Microsoft’s Azure market share rose from 16% in 4Q16 to 20% in 4Q17, indicating that the company’s cloud offering continued to gain momentum. Google (GOOG) saw its market share increase from 16% to 20% in 4Q17.

According to Keybanc, the public cloud market was worth $106 billion in 4Q17, which is expected to triple to $314 billion by 2022. With 20% of the market, Microsoft is a strong player in the cloud space, where efforts in AI (artificial intelligence) haven’t been recognized fully.

Highlighting AI’s crucial role in Microsoft’s vision for the cloud space Bracelin said, “We were very impressed by Microsoft’s AI platform and the traction with embedding and implementing AI services in the enterprise.”

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