Microsoft becomes third most valuable firm globally

Software giant Microsoft has surpassed Google’s parent company Alphabet in market capitalisation for the first time in three years, becoming the third most valuable firm globally after Apple and Amazon. On May 29, 2018, Microsoft reportedly had a market cap of $753 billion at the close of trading, almost $14 billion ahead of Alphabet. While Apple leads with a market cap of nearly $924 billion, Amazon is at a distant second, with nearly $783 billion.

Key Highlights:-
1. In its third quarter that ended on March 31, 2018, the tech giant posted revenue of $26.8 billion and net income of $7.4 billion.
2. The major credit in the growth, however, goes to the company’s CEO who has been strategically restructuring the company towards Cloud and Office offerings.
3. The company has managed to innovate across key growth categories of infrastructure, artificial intelligence, productivity and business applications to deliver differentiated value to customers.
4. The growth was mainly driven by consistent growth in its Office and Cloud solutions.

It is important because a company’s size is a basic determinant of various characteristics in which investors are interested, including risk. The investment community uses the figure to determine a company’s size, as opposed to using sales or total asset figures. It will help the investor determine the returns and the risk in the share.

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