Microsoft Briefly Surpasses $3 Trillion Market Cap; Tesla Falls Short in Q4

Quincy Jon, Tech Times 24 January 2024, 06:01 pm

During Wednesday's intraday trading, Microsoft briefly exceeded a market capitalization of $3 trillion thanks to a more than 1% increase, reaching about $404 per share.

After overtaking Apple as the world's most valuable public corporation on Jan. 12, it closed at $401.5 per share after a slight dip. Apple recovered the top spot on Wednesday with a $3.01 trillion market worth.

Microsoft's shares have climbed almost 7% year to date, showing investor confidence in its artificial intelligence efforts, notably with ChatGPT creator, OpenAI. The tech giant's achievement places it among Alphabet, Amazon, Oracle, and Meta Platforms in the generative AI race, as per a Reuters report. Microsoft improved its productivity software and Bing search engine using OpenAI's technologies to compete with Google.

Citi analysts predict Microsoft's fiscal second-quarter profits to surpass estimates due to its generative AI strength. While retaining a buy recommendation, they upped projections and target prices. Microsoft's improved generative AI status gives Morgan Stanley analysts confidence, upping their price target to $450.

(Photo : Ethan Miller/Getty Images)

Microsoft Chairman and CEO Satya Nadella speaks during a keynote address by Walmart Inc. President and CEO Doug McMillon during CES 2024 at The Venetian Resort Las Vegas on January 9, 2024, in Las Vegas, Nevada.

AI Optimism Boosting Microsoft

In the last month, 54 analysts following Microsoft's stock have raised their consensus price objective from $415 to $425 and recommended "buy." Microsoft's stock rose 57% in 2023 and 7.3% this year on AI optimism. Last year, Apple's stock value rose 48%, while this year it's up 1.3%.

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Microsoft will announce profits on Jan. 30 with experts predicting a record $61 billion in revenues, per Forbes.

It was also reported that Facebook's parent company, Meta, reached $1 trillion, its first since 2021, while Apple's iPhone demand is slowing, particularly in China, requiring uncommon discounts to stimulate sales amid fierce competition from Huawei Technologies. Stifel analyst Brad Reback remarked that Apple's "AI story" does not appear as clear as Microsoft's.

Tesla Fails to Hit Q4 Target Revenue

Tesla Issues Recall On 2 Million Of Its Vehicles In The U.S. Due To Autopilot Issue

(Photo : Brandon Bell/Getty Images)

AUSTIN, TEXAS - DECEMBER 13: A Tesla dealership is seen on December 13, 2023 in Austin, Texas. Tesla is recalling nearly all vehicles sold in the US after a near two-year investigation by the National Highway Traffic Safety Administration found a defect in the Autopilot system.

In a separate development, Tesla's Q4 profits and revenue were below estimates as vehicle sales rose 1% year-over-year, CNBC reported. Adjusted earnings were 71 cents per share, below expectations of 74 cents. Actual revenue was $25.17 billion, below $25.6 billion. Revenue stood at $25.17 billion, below the expected $25.6 billion. Total revenue increased by 3% from the previous year. The operating margin for the quarter was 8.2%, down from 16% in the year-ago quarter. The EV manufacturer attributed the sluggish auto sales growth to lower vehicle average selling prices after global price cuts.

The Elon Musk-owned company anticipates potentially lower vehicle volume growth in 2024 as it focuses on launching its "next-generation vehicle" in Texas, positioning itself between two major growth phases. Despite industry challenges, Tesla delivered 484,507 vehicles in Q4 and over 1.8 million in 2023 with the help of significant price reductions.

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