Microsoft, Meta, and Google are experiencing new highs in the stock market thanks to the AI race in Silicon Valley. Mark Zuckerberg’s Meta recently passed the $1 trillion mark in market value, while Microsoft briefly reached an astonishing $3 trillion in value. Google also momentarily surpassed its all-time stock high.
The upward momentum of US stocks on January 24 was fueled by optimistic traders reacting to positive data and strong earnings reports from tech companies. The S&P 500 and Nasdaq 100 both made significant gains, with Netflix Inc.’s shares soaring as subscriber numbers exceeded expectations. Meta Platforms Inc. reached a market value of $1 trillion for the first time since 2021.
The market valuation of Microsoft briefly reached $3 trillion during trading, showcasing the profound impact of optimism surrounding AI on its growth. While it closed at a slightly lower valuation of $2.99 trillion, this milestone solidifies Microsoft’s position as one of the largest public stocks. It briefly surpassed Apple, which achieved the $3 trillion milestone last year but ended with a market valuation of $3.01 trillion.
The latest US data indicating a substantial expansion in business activity for January is viewed positively for the stock market. The demand for AI services and cloud computing support is expected to contribute to Microsoft’s long-term growth, with revenue projected to rise by 15% in its 2024 fiscal year. Microsoft’s shares have surged by almost 57% in 2023 and continue to rise, while Apple’s stock has seen a more modest increase.
Microsoft’s strategic investment in OpenAI positions it as a frontrunner in the race for market dominance in generative AI. Leveraging OpenAI’s technology, Microsoft has introduced updated versions of its flagship productivity software and enhanced its Bing search engine to improve competitiveness with Google.
Meanwhile, Apple is facing challenges, particularly in China where demand for iPhones is slowing. In response, the company is offering rare discounts to boost sales amidst strong competition from local rivals.
Microsoft is set to report its second-quarter results later this month and its stellar performance has made it one of the most popular stocks on Wall Street. Both analysts and investors are enthusiastic about AI and its potential to accelerate earnings and revenue growth. Microsoft is seen as a major beneficiary of AI, offering AI-supported services to customers.
While Microsoft’s success is attributed to AI optimism, Apple faces concerns about iPhone sales growth rates and market penetration. The company may also face an antitrust lawsuit from the United States Justice Department, joining other tech giants that have faced legal action for monopolistic practices.
Countries around the world are introducing competition legislation to regulate tech firms and hold them accountable. These efforts could reshape the tech market and promote more equitable competition and ethical business practices.
Overall, Microsoft, Meta, and Google’s success in the stock market can be attributed to the AI race and the potential for AI-driven growth in the future. With their strategic investments and advancements in AI technology, these tech giants are positioning themselves for continued success.
