Microsoft could beat Google to become first $1 trillion tech company
The technology company’s LinkedIn acquisition could be the main driver for it to reach the $1 trillion mark
Earlier this year, in a surprise move, Microsoft announced its acquisition of LinkedIn, which now gives the company a chance to beat the likes of Apple and Google to become the first technology company to hit $1 trillion in valuation.
The $26.2bn acquisition of the business-orientated social networking site, adds to a number of acquisitions undertaken by Microsoft, including acquiring Skype in 2011, Yammer in 2012, and Nokia in 2014.
According to analyst Michael Markowski, who cited on Equities.com, said: "Microsoft's shares are a key core long-term hold for every portfolio. The LinkedIn acquisition will result in an increase in its PE multiple. Since Microsoft has the highest free cash flow yield of the 10 companies in my digital universe, it's the most undervalued. Microsoft clearly has the potential to outperform the market. Most importantly, the downside for its share price is limited since the current dividend yield is 2.5%."
What's more, Markowski said it is down to three factors; Microsoft's free cash flow yield is higher than other technology companies, its LinkedIn acquisition and the company's move towards social investing industry, which in effect will drive equity crowdfunding.
At present, Apple's market value is $622.6bn, followed by Google's parent company, Alphabet, worth $549.7bn and Microsoft is third with $489.3bn.