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Microsoft's value overtakes Alphabet for the first time in three years
Microsoft briefly surpassed Google's parent company Alphabet in market value for the first time in three years, suggesting a bounce back from a company widely regarded to have lost its way.
Microsoft became the world’s third most valuable firm at the close of trading on Tuesday. In early trading on Wednesday, the company grew again to a market value of $759bn (£570bn), beating Alphabet's market cap of $745bn. The two companies swapped places with Alphabet falling to the number four spot.
Microsoft’s stock price is now at $98 (£74) per share, up 40 pc in the past 12 months.
Apple retains its spot as the most valuable company and Amazon holds the second position. The change over in places only intensifies the race between the four companies to become first US company ever to land a trillion dollar market cap.
Google and Microsoft have regularly swapped spots in market cap ranks in the past decade but Alphabet has been in a comfortable lead over Microsoft since Google was restructured into the umbrella company in 2015.
This week, both Microsoft and Alphabet experienced a minor decline but the bigger drop recorded by Google aided Satya Nadella’s company.
Both businesses, who are long-time rivals, compete directly in artificial intelligence, speech recognition and cloud computing. However, Microsoft has suffered from problems with its pushes into hardware and mobile phones.
Former chief executive Steve Ballmer, in one of his last acts as Microsoft's boss, notoriously pushed through a €5.4bn (£4.7bn) acquisition of Nokia’s mobile phone business in 2013, in a desperate attempt to take on its old rival Apple.
Poor sales and a lack of developer backing, a necessity for making sure the phones came with apps that consumers would want to buy, meant that within months of Mr Nadella taking over the reins, he began to dismantle the once leading mobile brand.
Microsoft’s new focus on cloud and services such as Azure, which Mr Nadella led before stepping up as chief executive in 2014, has contributed to the company’s market value, with its recent advancements boosting investor confidence.
The company’s most important divisions have turned out to be its Office software such as Word, Excel and Outlook along with cloud.
Speaking on recent successes in an interview with the Sunday Telegraph, he said: “What we have learned is to just be consistent in building trust and just making sure that you’re not just measuring your success by your own success”.
While Google is also betting big on its cloud services, it has not proved as popular as Azure.
Analysts believe that Microsoft could achieve the one trillion market cap by end of 2018, and if the growth of Azure continues at this pace, the company could double its market value in a few years.
Both Alphabet and Microsoft were up around 1pc on Wednesday.