The newest Yahoo Finance Company of the Year Award winner Microsoft may not be done with the help of shareholders, according to bull Dan Ives of Wedbush.
The widely followed tech analyst said they think they can hit, if Microsoft will hit a $3 trillion market cap in early 2022. Ives rates Microsoft shares at Outperform with a $345 12 month price target.
Microsoft is only 23% shy of reaching the $3 trillion market cap level, despite a market value of $2.42 trillion. The company is just short of Apple as the world's most valuable company, as the iPhone maker's market cap currently stands at $2.7 trillion.
Microsoft is leading the way in the cloud, which is what we are seeing in the cloud. It's a re-rating as investors understand how this growth story is playing out, and that's what we have seen with the stock. Ives said that this is a $3 trillion market cap company.
Tech editor Dan Howley says that Microsoft won the coveted honor at Yahoo Finance, as well as a number of factors.
Microsoft's stock has put in a sterling 2021 value, along with a heightened volatility in big-cap tech stocks. Microsoft's stock price has gone up by 45% year-to-date, surpassing the S&P 500's 21% advance. The shares of Microsoft rivals, Apple and Amazon, have only gained 21% and 5.5% year-to-date.
Howley notes that the company's financials have been as impressive as its stock price performance. Microsoft has generated $176 billion in revenue over the past 12 months, up nearly 20% year-over-year.
The impressive momentum for Microsoft has attracted other bulls to the name, besides Ives.
Even after having become one of the largest companies in the world at $2.5 trillion in market cap, we still see a bright future ahead for Microsoft, driven by continued growth prospects in huge categories of IT spend, such as IaaS, cybersecurity, productivity, etc. Moreover, the ability to monetize strong positioning in multiple end markets via E 3, E 5, M 365, etc. Wells Fargo analyst Michael Turrin said in a Nov. 22 note to clients that the financial profile continues to have a strong growth and margin expansion from 30% to 42% op margin in five years.
The analyst initiated coverage of Microsoft with an Outperform rating and $400 price target.
Brian Sozzi is an anchor at Yahoo Finance. You can follow Sozzi on Twitter and LinkedIn.