SAN FRANCISCO--The bull run in Microsoft's stock this past year has helped the tech giant surpass Exxon Mobil and seize the rank of the second most valuable company, behind Apple Inc.

Under new CEO Satya Nadella, Microsoft has worked to overcome its reputation as a clumsy behemoth struggling to keep up with new tech trends and consumer habits. 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 US$410 billion on Friday. That leapfrogged Exxon's value of US$404 billion, 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 declining personal computer market. But compared with other longtime 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 currently the world's most valuable company, with a market capitalization of more than US$668 billion. That's more than the US$616 billion that Microsoft was worth when it was No. 1 in December 1999. Microsoft shares fell sharply the next year.

But the Redmond, Washington company has earned greater cachet on Wall Street over the last 18 months. Its stock has risen nearly 70 percent since April 2013, when activist investment firm ValueAct Capital announced it had taken a US$2 billion stake in the company and would scrutinize its strategy. Within a few months, longtime CEO Steve Ballmer announced plans to retire. The move was described as unrelated.

Since then, Nadella has announced new initiatives to expand in cloud computing, which promises to be more lucrative than the traditional model of selling software that is installed on clients' computers. Microsoft has also promised a redesign of its flagship Windows operating system and released versions of other popular software for smartphones and tablets, including devices made by competitor Apple.

Microsoft shares have outperformed the tech-heavy NASDAQ Composite Index, which gained about 45 percent in the same 18-month period. The stock hit US$50.04 on Friday, its highest point since early 2000, before slipping to the US$49.50 range in afternoon trading.

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What an achievement that is...

I'm sure the investors have to be in love with Nadella now.

Welp, I hope MS wins it cause if there is any company that can beat Apple again, its Microsoft!

Apple still first?

C'mon Google or MS! Beat them!

OT

microsoft is taking over again.

One day Microsoft will change the world.

Apple has this viral snob effect that is hard to beat. Like it has been said, if any company beats Apple it'll be Microsoft or even Google.

Exxon will probably be on top again tomorrow. The difference now is "just" 0.03 BN$, and MS is down 1.46% today, while Exxon is down only 0.25% In addition to that, Exxon is up 0.10% in after-hour trading, so it's tecnically already passed MSFT again.


Hpwever, it's all just a matter of time until MSFT passes Exxon for good.

Well oil is going to see a nasty decline in the coming decades as oil shortages force us to move to alternative energy sources, so this was inevitable. It did come sooner than I expected, but I'm sure Exxon still has some fight in it, so MS and Exxon will probably still be in range of each other for a while yet. We might start seeing more tech companies exceed oil soon, however.

Oh there will probably be a surge, no doubt about it, but the surge will be so extreme it will cause people to get pissed and move to alternative energy. We've used up over half the world's oil reserves already and energy demand is only increasing, so when the oil starts to run out in 20 to 30 years, the backlash will be unimaginable for anyone still stuck using oil. I suspect people will start moving to alternative long before that, and with tech in an inevitable perpetually rise as more developing nations develop to the point that they can afford modern tech, they'll start demanding more tech, tech will eventually outpace oil so much it won't even be a contest.