Meta and Microsoft gain over half a trillion dollars as AI bets pay off
- Meta's share price surged by over 11%, adding more than $190 billion to its market capitalization.
- Microsoft's share price increased by 8.5%, translating to an additional $320 billion and reaching a valuation of $4 trillion.
- The significant gains are driven by strong AI investments and cloud computing advancements, reshaping the tech industry landscape.
In recent developments, American technology giants Meta and Microsoft experienced a surge in their market value, collectively surpassing half a trillion dollars. This significant financial uplift occurred when Meta's share price rose over 11%, adding more than $190 billion to its market value. Meanwhile, Microsoft reported an 8.5% increase in its share price, translating to an additional $320 billion in market capitalisation, bringing its total valuation to approximately $4 trillion. The extraordinary performance of these companies can be largely attributed to their advancements in artificial intelligence (AI) and cloud computing. Meta's CEO, Mark Zuckerberg, expressed a strong commitment to AI development, revealing their plan to deliver superintelligence accessible to everyone. This is in line with their aggressive hiring strategy, aiming to bolster their AI capabilities significantly by bringing in top-tier talent, including Alexander Wang, co-founder of Scale AI. On the other hand, Microsoft highlighted the success of its AI tool, Copilot, which boasts over 100 million users. The company has announced plans to increase its investment in AI software, reflecting their belief in the sector's potential for driving future growth. Investment analyst Dan Coatsworth from AJ Bell commented on the impressive market performance, indicating that these developments have sparked excitement among investors, causing most companies to aspire to such levels of growth. Despite this remarkable rise, the landscape appears to be shifting within the U.S. tech market. Coatsworth pointed out that the influential group of major tech companies, previously known as the 'Magnificent Seven,' has now effectively been reduced to a 'Famous Five.' This change is mainly due to recent underwhelming performances of Apple and Tesla, both experiencing considerable declines in their share values this year. The transition from seven to five highlights the growing dominance of Meta, Microsoft, Nvidia, Amazon, and Alphabet in the tech sector and underscores the challenges faced by other prominent players.