14 DAY TRIAL // Apple has long been considered the leader in the race to become the world’s first one trillion-dollar company, but it looks like Microsoft is well positioned to achieve this historical milestone first, if the growth of its cloud business continues at the same high pace.
This is what Morgan Stanley says, adding that Microsoft’s cloud unit could more than double in the next few years, and this would eventually propel the firm to $1 trillion market cap, ahead of Apple and Amazon.
“With Public Cloud adoption expected to grow from 21% of workloads today to 44% in the next three years, Microsoft looks poised to maintain a dominant position in a public cloud market we expect to more than double in size to >$250 billion dollars,” analyst Keith Weiss said in a note to clients, according to a report from BI.
Morgan Stanley has also increased its price target for Microsoft shares to $130, which technically means the company would be worth more than $1 trillion.
Amazon could also reach $1 trillion threshold
Right now, Microsoft’s market valuation is $709 billion, and this makes it the fourth most valuable firm in the world, after leader Apple with $854 billion, runner-up Amazon with $738 billion, and third-place Alphabet with $721 billion.
Analyst forecasts are mixed on who could reach the $1 trillion market cap first, as recent statistics have shown that Amazon is in pole-position to do this in the next couple of years. GBH Insights analyst Dan Ives said in a note to clients that Amazon could achieve this target in the next 12 to 18 months, mostly thanks to its cloud strategy.
Previously, Apple was expected to do this first thanks to the 10th anniversary iPhone X, but sales of this particular model have until now been well below expectations. The 2018 iPhone generation is again projected to record high sales, particularly thanks to a more affordable device.