Shares of Microsoft Corp. (NASDAQ: MSFT) reached a new intra-day high of $104.29 just after noon Thursday to push the company’s market cap above $800 billion for the first time. Microsoft is the fourth most highly valued company in the world, trailing only Apple, Amazon and Alphabet (Google).
For Microsoft, the reason could very well be CEO Satya Nadella who took over in early 2014, following Steve Ballmer’s retirement. At the time Microsoft’s market cap was around $300 billion.
Unlike Ballmer, who tried to play catch-up in the smartphone business with its $7.3 billion acquisition of Nokia in 2013, Nadella put Microsoft’s talent and effort behind cloud computing and artificial intelligence. Microsoft dumped Nokia in 2016, taking a loss of about 90%.
In his 2017 book “Hit Refresh,” Nadella had this to say about the company he inherited:
The company was sick. Employees were tired. They were frustrated. They were fed up with losing and falling behind despite their grand plans and great ideas. They came to Microsoft with big dreams, but it felt like all they really did was deal with upper management, execute taxing processes and bicker in meetings.
While it’s easy to lay the credit or blame for a company’s success at the feet of the CEO, whether deserved or not, in this case Nadella appears to have earned a good share of the credit. He has focused on the company’s enterprise cloud business and built a massive artificial intelligence (AI) unit comprising some 5,000 computer scientists and software engineers, according to Forbes.
For a little more than four years of effort, Nadella and his Microsoft employees have doubled the company’s value and are poised to keep the party going. Shares traded at $104.13 shortly after the noon hour (by coincidence the very number needed to hit a market cap of $800 billion). The stock’s 52-week low is $71.28, and the 12-month price target is $112.56.