Microsoft Claims Top Spot, Surpassing Apple as the World’s Most Valuable Company
Microsoft Surpasses Apple in Market Value Amid iPhone Demand Concerns
In a significant market shift, Microsoft’s stock market value outpaced Apple’s for the first time since 2021, marking Microsoft as the world’s most valuable company. On Friday, Apple experienced a marginal 0.2% increase, while Microsoft gained 1%, propelling its market capitalization to a record $2.887 trillion, according to LSEG data. In contrast, Apple’s market capitalization stood at $2.875 trillion, as reported in a filing on Thursday.
The decline in Apple’s shares by 3% in 2024, coupled with Microsoft’s 3% rise year to date, reflects changing dynamics. Microsoft’s surge in 2023, driven by investments in generative artificial intelligence, including ChatGPT-maker OpenAI, contributed to its current market dominance.
Despite Apple’s record market capitalization of $3.081 trillion on Dec. 14, concerns over smartphone demand, particularly in China, have led to a 48% decline in shares since last year’s rally. In contrast, Microsoft’s strategic integration of OpenAI’s technology into its productivity software has revitalized its cloud-computing business and positioned it to challenge Google in web search.
As Apple launches its Vision Pro mixed-reality headset on Feb. 2 in the United States, Microsoft’s market lead, driven by AI, remains a formidable competitor. UBS estimates Vision Pro sales will have a modest impact on Apple’s earnings per share in 2024.
Notably, Micro briefly claimed the title of the most valuable company several times since 2018, with the last instance in 2021 amid concerns related to supply chain shortages due to the COVID-19 pandemic.
Both tech giants, Apple and Microsoft, appear relatively expensive based on price-to-earnings ratios. Apple’s forward PE of 28 surpasses its 10-year average of 19, while Microsoft trades at around 32 times forward earnings, exceeding its 10-year average of 24, according to LSEG data.
Analysts anticipate Apple’s revenue to rise by 0.7% to $117.9 billion for the December quarter, signaling its first year-on-year increase in four quarters. Meanwhile, Micro is expected to report a 16% increase in revenue to $61.1 billion, driven by continued growth in its cloud business, as it releases its upcoming financial results.
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