Technology

Microsoft Market Cap Matches France's GDP

Douglas A. McIntyre

Published: February 20, 2024 6:30 am

Based on the International Monetary Fund analysis of gross domestic product per nation, France ranks seventh with a GDP of $3.05 trillion. Microsoft Corp.’s (NASDAQ: MSFT) market cap hit the same level two days ago. It is as much a sign of just how valuable the world thinks the leading megacap companies are than that the French economy is unproductive. (See which English words are French in origin.)

The scale of Microsoft and France differ wildly on several measures. France has a population of 65 million people. Microsoft has 221,000. On that basis, the productivity per person is wildly different. And France’s population is growing, but only slightly. Microsoft recently said it would cut several hundred employees.

While France’s GDP has been flat, another sign of a comparison is that Microsoft’s market cap has grown by 40% in the past two years. Also, Microsoft’s revenue rose 18% year over year in its most recently reported quarter to $62 billion. Net income rose 33% to $22 billion.

Wherein is the real difference? Perhaps it is because of AI and Microsoft’s relationship with OpenAI. Investors believe Microsoft and a few other companies can massively change global productivity in the next few years. Microsoft could alter the financial output of hundreds of millions of people across virtually every nation on the globe. France’s economy cannot come close to doing the same.