TLDR
- Microsoft stock hit a new all-time high at $467.68, pushing market cap to $3.5 trillion and reclaiming the world’s largest company title from Nvidia
- The stock is up 6% over the past 30 days, outpacing the S&P 500 despite being near peak levels
- Azure cloud business continues strong AI-driven growth, though at some expense to gross margins
- Analysts maintain Moderate Buy rating with consensus price target of $513.13, about 11% upside potential
- Microsoft unveiled Majorana 1 quantum computing chip in February, positioning for future quantum breakthrough opportunities
Microsoft stock reached a fresh all-time high Thursday, closing at $467.68 and pushing its market capitalization to just under $3.5 trillion. The move allowed the tech giant to reclaim its position as the world’s largest public company by market value.
The stock gained 0.8% during the trading session, edging out Nvidia for the top spot by approximately $60 billion. This marks a quick turnaround for Microsoft, which had briefly lost its leading position to the chip maker.
Microsoft’s rise comes after a strong 30-day performance, with shares up 6% in the period ending June 3. This outpaced the broader S&P 500 index during the same timeframe.
Congrats to $MSFT longs for an all-time high pic.twitter.com/a6duFGVKKn
— Marcelo P. Lima (@MarceloPLima) June 5, 2025
The company has recovered well from the technology stock sell-off that affected the sector in early 2025. Many best-in-class technology companies have bounced back from those earlier declines.
Options traders remain bullish ahead of Microsoft’s late July earnings report. The stock faces less exposure to tariff concerns compared to some other technology names.
However, nervous investors may still target the stock for profit-taking on any negative headlines. Summer trading volumes typically decline, which could lead to consolidation or pullbacks before the earnings announcement.
Azure Powers AI Growth Story
Microsoft’s Azure cloud business continues to drive strong growth through its AI services. The cloud platform remains one of the fastest-growing services globally in its sector.
The company has invested heavily in AI data center buildout to support this growth. These investments have come at some expense to gross margins in recent quarters.
Microsoft isn’t slowing its AI spending but has achieved some internal productivity savings from AI implementation. The company is shifting more AI spending toward hardware, which should align better with future revenue growth.
The tech giant has embedded artificial intelligence across its product suite. Copilot integrations span the Office suite, while deeper collaborations with OpenAI expand AI capabilities.
Microsoft 365 and Teams have become core infrastructure for modern workplace operations. This broad enterprise base provides a key advantage over competitors focused on specific AI segments.
Quantum Computing Breakthrough Potential
Microsoft unveiled its Majorana 1 chip in February 2025, marking a potential breakthrough in quantum computing. The chip represents the world’s first top conductor based on breakthrough materials.
A breakthrough in quantum computing. Majorana 1 brings us closer to harnessing millions of potential qubits working together to solve the unsolvableāfrom new medicines to revolutionary materialsāall on a single chip. #QuantumComputing #QuantumReady https://t.co/mpj8VwEQj0 pic.twitter.com/zlQoyoFURv
— Microsoft (@Microsoft) February 19, 2025
The technology can observe and control Majorana particles to produce more reliable and scalable qubits. These qubits serve as building blocks for quantum computers.
Co-founder Bill Gates believes quantum computing could disrupt industries from materials to medicine within three to five years. This timeline differs from more conservative estimates suggesting decades before viability.
If quantum computing develops as Gates predicts, Microsoft would be positioned as a key beneficiary. The company’s early investment in quantum research gives it a potential first-mover advantage.
Valuation and Analyst Outlook
Microsoft currently trades at approximately 37 times earnings, about 3.5% above its trailing twelve-month average. The valuation sits even higher compared to three and five-year historical averages.
Short interest in Microsoft stock has increased about 13% over the past month. While overall short interest remains very low, this could create near-term headwinds for further gains.
Analysts maintain a Moderate Buy rating on the stock despite the elevated valuation. The consensus price target stands at $513.13, representing approximately 11% upside from current levels.
Several major firms have raised their price targets recently. Goldman Sachs, Citigroup, and Royal Bank of Canada set targets at $550, $540, and $525 respectively.
The analyst community sees solid upside potential despite current valuations being above historical norms. Strong AI and cloud growth prospects support the bullish outlook.
Microsoft’s market leadership battle with Nvidia has become a regular occurrence as both companies trade the top spot. The razor-thin margin between their market caps means leadership could change frequently based on daily trading action.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
