Bigtech fuels interest – Kommersant FM
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Microsoft’s capitalization exceeded $3 trillion for the first time. The cost of one share in trading on Wednesday immediately broke through the mark of $404. However, at closing it dropped to $402. Only Apple has so far surpassed the $3 trillion mark. The last time this happened was in December 2023. However, the Cupertino player lost the title of the most valuable US company; it was overtaken by Microsoft in early January. How can you explain the success? And what about other big tech stocks?
Economist, managing director of Trade123 Vladimir Rozhankovsky noted that investors have positive expectations from Microsoft’s quarterly reports: “In anticipation of the publication of Microsoft’s quarterly report, which we are waiting for, a lot has been said about artificial intelligence. Microsoft is one of the leaders here with its Bing. The company has been quite successful in trying to integrate with various platforms.
This could be a very serious direction for Microsoft, which will allow it to open an entire artificial intelligence department. And, accordingly, all financial models that predict a second wind for Microsoft are based on this. Of course, there is also an element of market populism. Here, most likely, we can talk about favorable expectations that may or may not be realized. For example, due to the fact that the idea with AI will not be able to monetize.
For Apple as a whole, forecasts for these six months are worse than a year ago. Investment houses point to weak sales of the latest iPhone model and, in fact, Apple’s lack of any replacement mechanisms that would make it possible to compensate for revenue if sales of the new iPhone are not realized at the planned volume. Anyone who invests in Apple usually also considers Microsoft. If Apple disappoints, I assume that capital will be poured into Microsoft shares.”
The main driving force of the American stock market since 2023 is the development of artificial intelligence. However, analysts have concerns about a bubble in this area. However, it is unlikely that it will burst in the near future; there are no prerequisites for this yet, says Dmitry Alexandrov, managing director of the investment company Ivolga Capital: “Artificial intelligence is of widespread interest. Many investors are trying to get on board this bandwagon. We have already seen such bubbles deflate more than once, for example, the so-called dot-com crisis. Different scenarios are possible. If inflation begins to accelerate, then perhaps we will see a continued rise in quotes, despite the fact that they seem to be no longer fully justified.
But if we look at the current moment, I would not say that the ratio of PI, that is, the value of the company to their net profit, is at any record levels. And in general, we are now seeing fairly average numbers over the last decade. The same is true for the level of debt load; there are no factors here that would stand out and speak of the imminent deflation of the bubble. Therefore, movements may continue on the horizon for at least the next six months.”
Currently, only five American companies are valued above $1 trillion. We are talking about Microsoft, Apple, Alphabet, Amazon and Nvidia. The latter was included in this list against the backdrop of the development of artificial intelligence. In addition, analysts expect that Meta, which is banned in Russia and recognized as extremist, may soon return to this list.
Everything is clear with us – Telegram channel “Kommersant FM”.
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