AI push drives Microsoft's market cap to record $2.6 trillion
What's the story
Microsoft has been riding high on the artificial intelligence (AI) wave. The company is one of the frontrunners in the AI race.
It seems Microsoft's AI bets are reaping rewards in the market too. On Thursday, the tech giant's shares closed at a new record high.
The rally took its market capitalization to a staggering $2.59 trillion.
Context
Why does this story matter?
Interest in AI has seen a significant increase over the past few months. Many attribute the next technology revolution to AI.
AI's increasing popularity hasn't gone unnoticed by the market. Microsoft isn't the first company to be benefitted from the growing belief in AI.
NVIDIA, the market leader in GPUs, hit $1 trillion in market cap for the first time earlier this year.
Rise
Microsoft's shares closed at $348.10, a record for the company
When the market closed on Thursday, Microsoft's stocks ended at $348.10, up by 3.2%. The company's previous record was $343.11, which it reached on November 19, 2021.
During the intraday trading yesterday, Microsoft's shares reached as high as $349.40. Its intraday record of $349.67 was set on November 22, 2021.
This year, Microsoft's stocks have gained nearly 45%.
Valuation
The company's previous high was $2.57 trillion
Microsoft's market capitalization has been rising steadily since March 2023. The AI wave healed the bruises on the company left by a tough 2022 that saw tech companies struggling like never before.
The firm has enjoyed high valuations before, but never $2.59 trillion. Its previous high was $2.57 trillion in December 2021.
Microsoft is currently the second-most valuable company in the world after Apple.
AI investment
Microsoft has invested over $10 billion in OpenAI
The growing affection of the market toward Microsoft is a testament to the success of its AI initiatives. The company has invested over $10 billion in OpenAI, the maker of ChatGPT.
That investment has paid off handsomely for the Redmond-based firm. Microsoft has made it a mission to bring AI into all of its products, and it's been doing just that.
AI initiatives
AI is driving the demand for Microsoft's products
From Azure to Windows to Office, it is tough to find a Microsoft product without AI integration these days.
The new GPT-4-powered Bing made the company a legitimate challenger to Google in search for the first time.
The demand for Microsoft's products has been on the rise due to AI. Analysts have a bullish viewpoint on the tech giant.