A month ago, we discussed Microsoft's race to become the first trillion dollar company, and that now seems closer than ever. The Redmond giant briefly eclipsed Google yesterday to become the second most valuable company in the world.
A dip in Microsoft stock has since put both Google and Amazon ahead, but there's not much in it. At the time of writing, Alphabet sits at $756.88 billion, Amazon at $755.05, and Microsoft $740.03. That $16 billion difference may seem an enormous amount, but it can all change in a matter of days.
It's also not a sight you may have expected before Satya Nadella took over. Since 2014, the new CEO has rebuilt the company with a laser focus on cloud and enterprise, to huge success. The company's share price has risen from $27.22 to over $96 under his guidance, and is poised for further growth.
Still Trailing Apple
Even so, it has a lot of work to do if it wants to catch Apple, as do Google and Amazon. It sits over 100 billion ahead at $876.79, but could lose out due to a less significant investment in corporate cloud and AI.
Last year, Microsoft saw a run rate of over $20 billion from its commercial cloud services, beating Nadella's estimate of 2018. It seems to be growing extremely quickly despite competition from Amazon, and its recent reshuffle will only aid in that.
Nadella re-organized the company for a stronger focus on Cloud and AI, two areas he believes will be essential going forward. Analysts at Morgan Stanley believe Office 365 revenue could double by 2020, propelling it ahead of competitors.
Whatever the case, it's going to be a close battle between the three giants over the next few years, and one that investors will be watching closely.