Could Microsoft Become the Next $5 Trillion Giant? Here's What the Numbers Say

The Race for Market Cap Crown

Just weeks ago, Nvidia made headlines by briefly crossing the $5 trillion market cap threshold, cementing its dominance in the AI infrastructure space. But that crown may not stay there long. According to Wedbush analyst Dan Ives, Microsoft could hit the same $5 trillion market cap milestone by 2026—and based on current trajectories, it’s far from a wild prediction.

The math is straightforward: Microsoft’s current market cap sits around $3.6 trillion, meaning the stock needs a 41% climb from today’s levels to reach that coveted $5 trillion target. While that sounds ambitious, Microsoft’s momentum in AI-driven productivity tells a different story.

AI Isn’t Just About Chips Anymore

Here’s the critical distinction: Nvidia powers the infrastructure that makes AI possible, but Microsoft is the one building the customer-facing solutions that people actually use every day.

When OpenAI trained ChatGPT, it relied on Nvidia’s computing prowess. But ChatGPT went viral because of what it does for users—drafting emails, generating images, writing code, you name it. That’s where Microsoft stepped in. With its 27% stake in OpenAI (valued at roughly $500 billion), Microsoft gained access to cutting-edge large language models and deployed them across every corner of its business: cloud computing, productivity tools, and personal computing devices.

The adoption metrics speak volumes. Microsoft’s Copilot AI assistant is now used by 90% of Fortune 500 companies. Even more telling: enterprise customers are coming back for more seats. Developers and cybersecurity professionals are increasingly relying on Copilot to boost their productivity. If Microsoft’s current 30% share of the office productivity tools market expands even modestly, the revenue implications are substantial.

The Azure Boom That’s Outpacing Supply

Microsoft’s cloud division tells an equally compelling story. Azure demand is growing so rapidly that Microsoft can’t keep up—the company plans to double its data center capacity over the next couple of years just to meet customer requests.

The real tell is Microsoft’s remaining performance obligations (RPO), which hit $392 billion at the last quarter—up a staggering 51% year-over-year. Think of RPO as the total value of contracts still waiting to be fulfilled. Here’s why this matters: Microsoft’s RPO ($392 billion) now exceeds its trailing 12-month revenue ($294 billion). Even more significantly, RPO grew at 51%, far outpacing the 18% revenue growth rate the company just posted. This suggests Microsoft is winning new deals faster than it can execute existing ones—a problem most companies would love to have.

The Path to $5 Trillion

Analysts are forecasting 16% revenue growth to $327 billion in the current fiscal year, followed by 15% growth to $376 billion the next year. But Microsoft’s RPO trajectory hints at something stronger.

If Microsoft achieves 20% revenue growth to $392 billion next year and maintains its current price-to-sales ratio of 13x, the math gets interesting: $392 billion × 13 = $5.1 trillion market cap. That’s basically right at the $5 trillion target.

Given the pace of AI adoption across Microsoft’s portfolio, the surging Azure demand, and the company’s expanding enterprise relationships, hitting a $5 trillion market cap by 2026 looks less like speculation and more like a reasonable projection grounded in fundamentals.

The real question for investors isn’t whether Microsoft can get there—it’s whether they want to ride that wave.