After a better than expected earnings for the last quarter, Microsoft stock shares rose 4% in after hours trading. That meant that the Redmond, Washington company overnight became the third company to hit the one trillion dollar market cap club. Apple and Amazon both did it last year and it had been expected that Microsoft would join the club this year.
For the third quarter, Microsoft posted revenues of $30.6 billion and net income of $8.8 billion. Those strong earnings pushed the stock value past the milestone and allowed the company to join the exclusive club. Earning were solid across multiple divisions in the company including Windows, Office, and Xbox.
Much like Apple and Amazon before it, Microsoft’s trillion dollar status did not last long. The stock, MSFT, is down slightly at the time of this post and the company is back down to only $959.1 billion. Regardless, it is a significant milestone for the company who has continued to diversify itself with services over the past decade. Once only known for the Windows Operating System, Microsoft has expanded its portfolio of products to include cloud services like Azure, and has moved Office to a subscription model in Office 365.
That model is what Apple is striving to do as it becomes more of a services company rather than a hardware-only company. Apple has brought several services online including iCloud, Apple News+, Apple Pay, and soon to have a subscription arcade service and original content TV service. Those plans help lower Apple’s dependency on iPhone sales which investors like as services can be more predictable than lumpy hardware sales.
Undoubtedly Microsoft, Apple, and Amazon will all bound around the one trillion dollar valuation throughout 2019, which in large part is driven by quarterly earnings.