(News Bulletin 247) – The IT services juggernaut now weighs more than $2,690 billion on the stock market and is gradually getting closer to Apple, which is still to this day the largest global company present on the financial markets.

Microsoft is on cloud nine. The IT services juggernaut is currently increasing by 0.52% to $362.53. Tuesday evening, the stock had already set a new closing record at $360.53, but its absolute record still dates from July 18, 2023 at $366.78.

It must be said that Microsoft is the stock in good shape on the American markets, supported by good financial results, thanks to the dynamics of its dematerialized computing services (cloud) with its flagship brand Azure.

This dynamic was also confirmed between July and the end of September, a period which corresponds to the first quarter of the group’s 2023-2024 financial year. Microsoft’s revenue peaked at $56.5 billion, while operating margin stood at 47.6%.

Above all, Azure’s revenue growth reached 29% over the quarter, compared to 26% over the same period of the previous year. This growth is also significantly higher than the consensus of 26% compiled by CNBC. Overall, all cloud services (including Azure) generated $24.3 billion in revenue in the quarter.

Bright sunshine for Azure

The activity of this segment, as well as the valuation of Microsoft, benefits from the craze for generative artificial intelligence (AI), personified by ChatGPT. Microsoft has also invested more than 10 billion dollars in OpenAI, the creator of ChatGPT, integrating its generative AI technologies into its services such as Bing, its search engine.

“We estimate that for every $100 of Azure cloud spending with Microsoft, there is an additional $35 to $40 of AI spending that is now on the table, which is a game changer,” said Dan Ives, the analyst at the design office in charge of tech at Wedbush, at the beginning of July on Twitter.

And the enthusiasm for Microsoft’s generative AI solutions is giving wings to its stock market share. The company managed by Satya Nadella has therefore enjoyed a very good stock market performance since the start of the year. Its action has increased by more than 50% since January 1.

This increase in the stock therefore pushes Microsoft’s market capitalization – the stock market value of all shares – to $2,694 billion, according to data from companiesmarketcap.com. The stock market weight of the technology group is now close to the giant Apple, the world’s largest capitalization valued at $2,861 billion.

Apple, future fallen king?

And Microsoft’s excellent form is about to shake up the world stock market hierarchy. The difference in capitalization between the two global behemoths represents barely 6%. That is less than 170 billion dollars. In other words, not much anymore. At the beginning of September, for example, Apple had swallowed up almost $200 billion in market capitalization in two sessions, following information from the Wall Street Journal concerning a ban on the use of its products by Chinese officials.

Microsoft is therefore well prepared to take the coveted place of the world’s largest capitalization from the Cupertino group. And this is not the first time that Apple has been threatened in its kingdom. In May 2022, King Apple was dethroned in favor of Saudi Aramco. The Saudi oil giant had benefited from the surge in crude prices following the Ukrainian conflict. For its part, Apple had lost its lead on the stock market weighed down by the prospect of monetary normalization faster than expected from the Fed to counter galloping inflation.

Incidentally, it should be noted that Saudi Aramco, with a market capitalization of currently $2,165 billion, is now largely relegated to third place in the world behind Microsoft and Apple.

This battle between the two American tech giants is reminiscent of the one that took place in Europe in the middle of summer between the French luxury juggernaut LVMH and Novo Nordisk, the Danish pharmaceutical group. The match turned to the advantage of the latter last September. Driven by the success of its anti-obesity drugs, Novo Nordisk has thus put an end to the domination of LVMH on the European stock market since 2021. The French group had dislodged Nestlé from its place as the largest European capitalization.