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MS Valuation Hits Trillion Dollar Mark

Ed Tittel
Ed Tittel

On April 30, the trading day ended with Microsoft’s valuation above US$1 Trillion, at $130.60 per share. According to MarketWatch, this makes “Microsoft the second U.S. company to hit the trillion-dollar valuation after Apple, which has since retreated below $1 trillion.” Other sources identify MS as $1T Company number three, behind Apple and Amazon. Wow! In fact, this makes MS one of the most valuable companies around (arguably the most valuable at the time of this writing). As MS valuation hits trillion dollar mark, what does this say about the company and its offerings?

Over the past year, MS stocks had some ups and downs, but the overall trend continues upward.
[Source: Nasdaq MSFT info; Click image for full-sized view.]

MS Valuation Hits Trillion Dollar Mark, Now What?

Not surprisingly, a quick look at the company’s third quarter FY 2019 results shows where its growth and strength originate. Highlights include the following:

  • Revenue of US$30.6B, up 14% year over year.
  • Operating income of US$10.3B, down 25%.
  • Net income US$8.8B, up 19%.
  • Diluted earnings per share of $1.14, up 20%.
  • Share buybacks and dividends to shareholders totaled US$7.4B (and explain operating income declines).
  • Productivity and Business Processes revenue was US$10.2B, up 14%. This included gains in Office Commercial (12%), Office Consumer (8%), LinkedIn (27%), and Dynamics (13%).
  • Intelligent Cloud revenue was US$9.7B, up 22%. This included server products and cloud services (27%), enterprise services (4%).
  • More Personal Computing revenue was US$10.7, up 8%. This included Windows OEM (9%), commercial products and cloud services (18%), Surface (21%), and more.

Things are jumping upward all over, apparently. MS forecasts this behavior to continue for the rest of calendar 2019 and beyond. The real growth (and driver for future growth) comes from Azure, and its increasing mind and market-share for cloud-based and -enabled tools, technologies and platforms. As a long-time Microsoft follower and fanboy, it’s odd to think of the Colossus of Redmond as a true colossus indeed, even in financial markets. But that’s where and how things stand right now. Given Apple’s rise and subsequent fall from such grace, one hopes MS can hang in there and keep up the good work for some time to come.