Microsoft's $26.2bn (£21.3bn) acquisition of LinkedIn could make it the first company to reach a market value of $1tn surpassing that of Apple and Alphabet, according to an analyst.
Apple has the highest market cap of $621bn as of 23 December followed by Alphabet at $557bn and Microsoft at $491bn. Michael Markowski, writing for Equities.com, now predicts the Redmond tech giant is on course to reach a market value of $1tn due to three main factors:
The company's free cash flow yield is the highest among of all contenders that include Apple, Alphabet, Amazon and Facebook
- LinkedIn acquisition expands Microsoft's PE multiple
- Microsoft is in position to play a key role in new social investing industry (SIC) which is the key to drive crowdfunding to ubiquity
Markowski says Microsoft will reach this goal by making LinkedIn a leader in social media and the emerging crowdfunding industry. In fact, he predicts that online crowdfunding will be the next technological revolution, on par with the creation of the internet, email, social media, smartphones and apps.
The online equity crowdfunding will be to Microsoft what the smartphone app revolution was to companies like Uber, Airbnb and Snapchat that made them count among the most valuable private companies in the world. The report, however, does not say by when Microsoft will achieve this feat although he expects the social media industry to drive online equity crowdfunding by 2025.
As for Microsoft's stock, it hit an all-time high in October and has continued to climb since then. Although the company's mobile division has not been shining, its cloud platform Azure and its Surface products have helped the company climb this year.