As a matter of fact, Apple is the most valued company in the world as of now. However, Microsoft is all set to become the first trillion dollar company. How? Read on to know more.
First Trillion Dollar Company
Stock market analysis has it that tech giant, Microsoft could be the first trillion dollar company. Michael Markowski, an analyst for Equities.com is of the opinion that although Microsoft stands third after companies like Apple and Alphabet, it will be more than trillion dollars in the final valuation.
In 2015, the share price of Apple, multiplied by its number of outstanding shares exceeded $710 billion. It was the first time any company had been valued at more than $700 billion. Apple’s market capitalization subsequently rose to $775 billion before it slipped to $617 billion, where it stands today.
The present valuation of the top five tech firms, publicly traded, are Apple at $617 billion, Alphabet at $548 billion, Microsoft at $492 billion, Amazon at $359 billion, and Facebook at $333 billion. According to this analysis, Microsoft is in the best position to become the first trillion dollar company, the analyst for Equities.com reportedly said. Microsoft, a software company, according to him, is more scalable. Its audience base is larger than Apple which is a hardware company with a more limited customer base.
The recent acquisition of LinkedIn by Microsoft also helped increase its valuation in the market. This is because earnings from social media have higher valuation themselves. The price for every professional using LinkedIn was sold to Microsoft for only $60. These LinkedIn subscribers were all professionals that get paid more than the average user of any other social media. Compared to Microsoft, Facebook got a harder bargain paying $218 for each of its users.
According to analysis, Microsoft will have to multiply its stock price by two to reach the $1 trillion mark in valuation and become the first trillion dollar company. When the number of LinkedIn subscribers rise to 700 million in 2020 from the present 433 million, it will benefit Microsoft. Markowitz thinks that Alphabet is the only company that can give Microsoft a run for its money when it comes to hitting the $1 trillion target. He foresees the competition as being between these two companies, and Apple will have no role to play in it.