Microsoft Is Worth $5 Trillion, According to Expert
Wedbush's Dan Ives predicts that Microsoft will be worth $5 trillion in 18 months, as it leads the industry in integrating artificial intelligence into cloud computing. The post Microsoft Is Worth $5 Trillion, According to Expert appeared first on 24/7 Wall St..
Dan Ives, Wedbush Securities global head of technology research, told CNBC that Microsoft Corp. (NASDAQ: MSFT) will be worth $5 trillion in 18 months. That would be 35% higher than the current valuation, which is already at an all-time high. Microsoft is basically tied with Nvidia as the most valuable company in the world, with a current market cap near $3.7 trillion.
24/7 Wall St. Key Points:
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Wedbush’s Dan Ives predicts that Microsoft Corp. (NASDAQ: MSFT) will be worth $5 trillion in 18 months.
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He believes it will lead the industry as artificial intelligence is integrated into cloud computing.
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Ives believes that Microsoft will lead the industry as artificial intelligence (AI) is integrated into cloud computing. Microsoft is number two in the cloud market. Amazon’s AWS had a 30% share of the worldwide cloud infrastructure market late last year, according to Synergy Research Group. Microsoft’s cloud operation, called Azure, had 21%. Synergy reports that the entire industry posted revenue of $330 billion last year. In the fourth quarter, revenue for the sector was up 22%. John Dinsdale, chief analyst at Synergy Research Group, commented, “Given the already massive size of the market, we are seeing an impressive surge in growth.”
Ives argues that Microsoft is the best candidate to integrate AI into its software.
The large rise in Microsoft’s stock is a tall order. Microsoft says it will invest $80 billion in data centers in the next year. Meta said its investment would be $60 billion to $65 billion. Amazon’s investment for similar purposes would be $100 billion. While the investment levels are clear, it is hard to say if one of these has a huge technology advantage over the others. Which one is ahead in the integration of AI into its cloud operations is impossible to tell.
One theory was that Microsoft’s investment in industry powerhouse OpenAI would give it the industry lead. However, there is a bitter feud between the two about technology use and Microsoft’s ownership level of OpenAI.
There may also be a cap on how fast any of these companies can grow. AI data centers face limits of U.S. electricity generation. Each data center uses a massive amount of electricity and has started to compete with non-AI businesses and residential customers. Some AI-driven companies are trying to build their own sources of energy. For example, Microsoft has partnered with utility Constellation Energy to reopen the reactors at Three Mile Island, which experienced a partial nuclear meltdown in 1979.
It may take years to know if Ives is right. Microsoft faces huge competition for both technology and energy.
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