Road to $3 Trillion: Powered by Cloud + AI

Microsoft (NASDAQ: MSFT) is now worth $3 trillion.

That makes it the world’s most valuable company. And the first stock to achieve this valuation milestone.

It’s easy to dismiss this as simply “AI hype.”

Yet that would be a huge mistake.

Let’s take a look at Microsoft’s road to $3 trillion.

Back in 2014 Microsoft announced a new CEO.

Sataya Nadella had led Microsoft’s cloud computing business. And he was promoted to CEO when Steve Ballmer retired.

Shares of MSFT were flat for Ballmer’s entire time as CEO.

Nadella brought a growth and startup mentality to the world’s largest software company.

Plus, he doubled down on the Azure cloud computing platform.

This allowed Microsoft to grow its cloud business to over $64 billion – giving it a 37% market share.

Nadella also saw that Artificial Intelligence was the future of software.

That’s why Microsoft invested heavily in a Silicon Valley startup called OpenAI (private) – the maker of ChatGPT.

In 2019 Microsoft put up $1 billion. And in 2021 the firm invested another $10 billion.

That gave Microsoft a 49% stake in OpenAI.

Skeptics will say that this deal was simply hype.

Yet that isn’t the case…

Microsoft is rolling out AI in all of its products – from the Azure Cloud to the Microsoft 365 Copilot.

This will supercharge the firm’s impressive growth in the coming years. And it could add over $25 billion in sales.

Take a look at this 25-year chart of MSFT.

You can see that the stock has gone from under $40 to over $400 with Nadella at the helm.

I jumped into MSFT stock in Feb. 2023 at $248 per share.

That was right after the $10 billion investment in OpenAI. And I explained that Microsoft stock was a backdoor way to invest in the hottest Silicon Valley startup.

Fast forward 11-months and the stock is up 63%.

Here’s the key takeaway…

The simplest investment is the best.

Here’s what I mean. Last year you were probably amazed by ChatGPT.

You knew that Artificial Intelligence was going to be huge.

The easiest way to play the trend was obvious:

Just buy shares of Microsoft.

You could’ve bought the stock anytime last year. And you’d be sitting on healthy profits today.

Keep it simple.

Ian

P.S. It’s hard to recommend Microsoft now that it’s at +$400 per share.

However, it’s also hard to bet against a stock that will be one of the biggest AI winners.

Right now, I’m HOLDING the stock. And I’ll add to my position on any weakness.