Microsoft (NASDAQ: MSFT) reported a market capitalization of $3.695 trillion as of Friday morning, requiring just an 8.3% increase in stock value to potentially join the $4 trillion club by the end of 2025. The company, driven largely by advancements in artificial intelligence (AI), has become a leader in both software and cloud computing sectors.
Microsoft’s extensive investment in AI, including around $14 billion in OpenAI, has bolstered products like Copilot, which tripled its enterprise adoption in the last year to hundreds of thousands of organizations. Notably, Azure AI, part of Microsoft’s cloud services, contributed significantly to revenue growth, accounting for 16 percentage points in the recent fiscal quarter, compared to just five points nearly two years ago. With a backlog of $315 billion in AI orders and plans to spend over $80 billion on AI infrastructure in fiscal 2025, the company is strategically positioned for continued growth.
Wall Street estimates suggest Microsoft could achieve an earnings per share (EPS) of $15.14 in fiscal 2026, indicating a potential 13% growth. To maintain its current price-to-earnings ratio of 38.2, the stock would need to rise by 17% over the next 12 months, aligning with the strength of its AI business.
