The surge in the stock at Microsoft in 2014 has helped the software tech behemoth pass Exxon Mobil as the second most valuable company, trailing just Apple Inc.
Under Satya Nadella, the new CEO, Microsoft has been working to overcome a reputation as a clumsy giant struggling to stay abreast with the new trends in technology and habits of consumers.
Nadella has slashed jobs and other expenses, while pledging a refocusing of the company on cloud computing and mobile technology.
His efforts helped to fuel a surge in the stock that drove the total market value of Microsoft above $401 billion Friday. That move helped the software giant to leapfrog Exxon, which is valued at $404 billion. Exxon has been hit by the plummeting of oil prices.
Apple is at present the most valuable company in the world with a $668 billion market capitalization. That is over $619 billion higher than Microsoft was in 1999 when it held the No. 1 spot 15 years ago. However, the next year, shares of Microsoft fell sharply.
One analyst said Microsoft was going through a strategic chance and still faces challenges, as the company is reliant heavily on the declining market of the personal computers.
However, compared with other long term stalwarts in the tech industry like Hewlett-Packard, Oracle and IBM, Microsoft has succeeded the best in attempting to skate towards the puck, added the analyst.
However, the past 18 months Microsoft has moved up the stock market board. Its shares have increased by close to 70% over the past 18 months.
ValueAct Capital took a $2 billion stake in the business as an activist investor and announced it would scrutinize the company’s strategy in April of 2013. Within just months, Steve Ballmer the longtime CEO announced his retirement plans. That move was said to be unrelated.
However, since taking over, Nadella has announced many new initiatives including expanding cloud computing, which will be more lucrative than the selling of traditional software that is then installed on the computers of clients.
Microsoft also has promised to redesign its flagship Windows system and release a version of other software for tablets and smartphones.
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