Microsoft Corp. (NASDAQ:MSFT) recently leapfrogged Apple to become the most valuable global corporation, thanks to the software giant embracing artificial intelligence in a big way. As the stock gathers mass, investors are left to ponder over the question whether the AI-induced upside is justifiable.
What Happened: Based on Friday’s closing price of $420.55, Microsoft market cap is at $3.125 trillion. Macro strategist and Crescat Capital partner Otavio Costa on Thursday shared a graphic comparing the Satya Nadella-led company’s market cap as well as its free cash flow generation to those of energy companies.
Microsoft’s valuation is nearly double that of the energy companies in the S&P 500 Index even as it generates half the free cash flow as these companies, the analyst said.
He called the statistics “puzzling.”
Puzzling.
With a $3 trillion market cap, Microsoft is twice the size of the entire energy sector in the S&P 500, which generates double Microsoft's annual free ...