Microsoft Could Overtake Amazon’s Market Cap

October 26, 2018
1066 Views

Apple remains the undisputed king of the stock market, with a record market capitalization figure of $1.04 trillion. A month ago, it looked as though Amazon was not far behind, however, this may now be compromised by Microsoft impressive growth.

The Redmond based company released its quarterly earnings this week, revealing strong growth that sent investor confidence upwards. Some analysts now predict that Microsoft could become the second most valuable publicly traded company, pushing Amazon down to the third spot.

Microsoft Earnings Have Left Investors Confident of Continued Growth

Microsoft beat Wall Street expectations by reporting income with a 34% increase over the same quarter last year. it took $8.8 billion in net income during the last quarter. Earnings are currently 94 cents per share. Income is up thanks to a 19% increase of revenue. Microsoft generated $29.08 billion through sales in the three-month period.

The news had investors feeling confident on Thursday. By the close of the market, it was up 5.84%.

Microsoft hasn’t been immune to stock market volatility this October, but impressive gains throughout the year mean that stock is still far ahead of where it was in 2017. Value has increased 29.22% in the last 12 months, and 26.61% in the year to date. If there’s a strong stock rally at the end of this year, then Microsoft has the potential to pass Amazon, and come close to Apple.

Microsoft’s total market capitalization today is $785.56 billion, while Amazon is just ahead with $811.7 billion.

What Does Market Capitalization Tell You About an Investment?

Market capitalization is the total value of all shares, irrespective of per-share price.

When comparing companies that compete against each other, market capitalization should always be considered. Apple, with the highest figure of any publicly traded company, receives massive confidence from investors. Its high market capitalization is an indicator of success. Companies that can maintain extremely high capitalization figures are typically those that command investor appeal, are well managed, and have a long history of success.

If you’re yet to add Microsoft to your portfolio, then now could be a good opportunity. Although investors are rallying behind the company, it is still down -5.13% for the month (thanks to wider market volatility), which means you could have a lower cost of entry for an immensely popular and profitable stock.

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