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Microsoft just regained its position as the second most valuable US company by market capitalization after losing it to Amazon back in April this year.

The news comes after Microsoft reported good quarterly profit driven by its cloud computing business whereas report stated that Amazon essentially pushed itself down, having a ‘disappointing quarterly report’ which wiped $65 billion from the company’s market capitalisation.

Amazon’s shares dropped 7 percent, the most in nearly three years after its holiday season sales outlook missed targets, with analysts believing that the company is finally facing more serious competition from other retailers.

Reuters says this was due to a ‘broad technology sell-off’ triggered by an unexpectedly poor report from Alphabet which led to the fall.

Today’s 6 per cent drop included, Amazon is now down 16.3 per cent for the month. Microsoft by contrast has lost just 5.8 per cent for the month to date.

Despite the slight fall, Microsoft’s shares are still up almost four per cent from Wednesday, with a stock market valuation of $823 billion. Analysts value the company at $963 billion.

“Amazon’s tumble left it up around 40 per cent year to date, while Microsoft has gained about 25 per cent in 2018,” it says. “On Wednesday, Amazon’s stock traded at the equivalent of 70 times expected earnings, its lowest level since 2011.”

Report also stated that since the new CEO Satya Nadella took over in 2014, Microsoft has shifted focus into cloud computing and data centres, with much success. Its Azure business, together with Office 365, are raking in serious profit for the company.

Apple is still the undisputed champion on the list, with a valuation of more than a trillion dollars. It crossed that threshold this September. Amazon’s shares fell almost seven per cent, which is the hardest they had fallen in the last three years. Reuters believes this is a signal that Amazon is ‘finally starting to face stronger competition’.

Apple is going to report its quarterly results on November 1, so we are eager to see if there are any changes there but given the iPhone XS and XS Max release, the results should be more than satisfactory and will keep the company afloat

 

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