Microsoft became a $1 trillion company today

For the first time, Microsoft’s market cap topped $1 trillion today, having crested the lofty valuation after posting its third quarter financial results. How did it happen? Gaming played a part, but was not the primary driver.

In fact, gaming performance was actually a bit disappointing for Microsoft, despite seeing a 5 percent year-over-year jump in related revenue, which was largely driven by Xbox software sales and services. Overall, the $2.36 billion it pulled in from its efforts in gaming was “lower than expected.”

Nevertheless, Microsoft still sees a “massive opportunity in gaming,” where it noted “record user engagement” even though that didn’t translate into quite the kind of revenue it was anticipating.

That’s largely attributable to its Xbox console. It was also partially offset by Microsoft’s PC revenue, which jumped 8 percent to $10.7 billion last quarter and was “better than expected.”

“In Windows, the overall PC market was stronger than we anticipated driven by improved chip supply that met both unfulfilled Q2 commercial and premium consumer demand as well as better than expected Q3 commercial demand,” Microsoft’s chief financial officer Amy Hood said.

Percentage wise, Microsoft saw the biggest gains in its cloud revenue. Cloud revenue rose 41 percent year-over-year.

Microsoft is just the third US company to top $1 trillion, following Amazon and Apple. To put that figure into perspective, here’s an NYT older article from when Apple reached the milestone, with some interesting visuals. As of this moment, Microsoft is worth more than Exxon Mobil, Visa, Advanced Auto Parts, Stanley Black and Decker, and Dollar Tree combined. $1 trillion is also higher than the GPD of Turkey, and twice that of Belgium. It’s a lot of money, in other words.

Can Microsoft sustain that kind of valuation? That depends on a variety of factors. Microsoft warns that “intense competition” in every market could lead to lower revenue. However, it was a strong year for Microsoft. Windows 10 also continues to gain ground—deployments “remained healthy,” with Windows 10 now on 800 million devices.

source: gamezpot.com