SAN FRANCISCO — The bull run in Microsoft’s stock this past year has helped the tech giant surpass ExxonMobil and seize the rank of the second most valuable company after Apple Inc.
Under CEO Satya Nadella, Microsoft has overcome its reputation as a clumsy behemoth struggling to keep up with new trends. Nadella has cut expenses and jobs while pledging to refocus the company on mobile technology and cloud computing. His efforts have fueled a stock surge that drove Microsoft’s total market value above $410 billion Friday. That leapfrogged the $404 billion value of Exxon, which has been dinged by the drop in oil prices.
“Microsoft has made a strategic change,” said Daniel Ives, a tech analyst at FBR Capital Markets.
He said Nadella still faces challenges with a company that’s heavily reliant on the personal computer market. But compared with other tech stalwarts such as IBM, Hewlett-Packard and Oracle, “Microsoft has done the best job of trying to skate where the puck is going,” Ives said.
Apple is the world’s most valuable company, with a market capitalization of more than $668 billion. That’s more than the $616 billion that Microsoft was worth when it was No. 1 in December 1999. Microsoft shares fell sharply the next year.
The Redmond company has earned greater cachet on Wall Street in the past 18 months. Its stock has risen nearly 70 percent since April 2013, when investment firm ValueAct Capital said it had taken a $2 billion stake in the company and would scrutinize its strategy. Since then, Nadella has announced initiatives to expand in cloud computing, which promises to be more lucrative than selling software. Microsoft has also promised a redesign of its Windows operating system and released versions of software for phones and tablets.
Microsoft shares have outperformed the NASDAQ Composite Index, which gained about 45 percent in the same 18 months. The stock hit $50.04 per share Friday, its highest since early 2000, before slipping to $49.50 in afternoon trading.
