Microsoft closed out the fiscal year as the most valued publicly-traded company for the first time since 2002.
Apple had closed out every year since 2012 as the most valued public company by market cap. However, Apple stock has fallen significantly in value since October, losing 37.4 percent of its stock value. Amazon’s stock also fell by 25.1 percent. Yet despite these large sell-offs in stock markets around the nation, Microsoft was hit less severely, with its stock value only decreasing by 15.6 percent.
The tech giant was close to surpassing Apple in late November as their stock quickly regained lost value during widespread October sell-offs. Then on Nov. 30, Microsoft closed ahead of Apple in market capitalization, meaning the total dollar value of Microsoft’s outstanding shares were higher than Apple’s. As of Jan. 3, Microsoft’s market cap sits at $750 billion, while close competitors like Apple and Amazon are valued at $675 billion and $735 billion respectively.
“We had an incredible year, surpassing $100 billion in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft,” said Microsoft CEO Satya Nadella in a press release. “Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation.”
Nadella has led Microsoft as CEO for nearly five years, shifting focus away from Windows and toward new business strategies and growing markets — specifically the cloud computing market. Microsoft Azure now controls 29.4 percent of the cloud computing market, with Amazon Web Services at the top spot with 41.5 percent, according to a 2017 Cloud Security Alliance (CSA) report.
Microsoft’s cloud computing revenue is growing at a faster rate than Amazon’s, with Microsoft reporting an 89 percent year-over-year increase in revenue, according to the company’s Q4 earnings report. By comparison, Amazon’s revenue increased by 49 percent in Q2, allowing Microsoft to eat up large amounts of the market quickly.
Subscriptions have seen a large boost as well. Instead of advocating a straight purchase of Microsoft Office, Nadella has emphasized selling subscriptions of the tools as Office 365. The results have been positive — sales have risen 19 percent while earnings have gone up 36 percent.
Microsoft’s performance in Q4 was also bolstered by company’s recent acquisition of LinkedIn. Microsoft acquired the company for $27 billion in 2016, and in 2018, saw its annual revenue spike to $5.3 billion. Increased revenue from the Surface line of devices has aided growth as well, with Surface revenue growing by 25 percent in Q4.