Will Microsoft (MSFT-NASD, $136.20) be the First Company to Ultimately Break a $2 Trillion Market Cap?

On the heels of a recent quarterly report which highlighted an impressive growth rate at the business level of cloud data storage, along with an impressive overall EBITDA margin improvement in sales, it seems that there is little to hold Microsoft back in the coming years.

Unlike the FANG stocks which carry high levels of regulatory risk due to their fixation on extracting and selling consumer information regardless of the social and legal costs, Microsoft has carefully maintained an emphasis on providing essential services primarily for business. That model does carry execution risk but MSFT has proven capable of capitalizing on secular data trends without alarming regulators and politicians.

Provided that MSFT can grow annual revenues to more than $240 billion, at some point in the coming years, plus increase EBITDA to an average of 50% plus EBITDA margin and be valued at 16.7X EV/EBITDA, a $2 trillion market cap certainly seems possible.

The large cap portfolio has done exceedingly well with ownership of investments featuring high EBITDA levels, above average revenue growth rates and that are fully on trend with important secular developments globally. MSFT certainly seems to tick every box needed to support an ownership thesis.