Microsoft shares closed above $500 for the first time on Wednesday – a symbolic milestone as Wall Street increasingly relents on its role in the AI boom.
The Redmond company’s market value is over $3.7 trillion, and Wedbush analysts predicted Thursday morning that the company is on track for a $4 trillion valuation. That was a milestone briefly reached by Nvidia earlier this week, driven by demand for its AI chips.
“We believe Microsoft will also reach the $4 trillion market cap club this summer, and over the next 18 months, the focus will be on the $5 trillion club,” Wedbush analyst Dan Ives and colleagues wrote in a note to clients, saying they believe
Microsoft is making AI investments across cloud services, including Microsoft Copilot, Office, and GitHub. It also continues to benefit from its high-profile partnership with OpenAI, even as that relationship evolves.
It is spending heavily on AI infrastructure with $80 billion in annual capital expenditures in its recently concluded fiscal year.
At the same time, Microsoft is shedding jobs, cutting about 15,000 positions in recent months, citing a desire to increase efficiency. Speaking to reporters on Wednesday, Microsoft President Brad Smith said that AI is “not a predominant factor” in the job cuts.
Microsoft saved more than $500 million last year by using AI in its call centers, while also increasing employee and customer satisfaction, according to a Bloomberg News report citing an internal presentation by Chief Commercial Officer Judson Althoff.
In its latest AI initiative, Microsoft announced on Wednesday a $4 billion commitment over five years to help schools and nonprofits adopt AI through a new program called Microsoft Elevate. The program, which includes both cash and technology grants, aims to train 20 million people in AI skills over the next two years.
