Microsoft has taken the lead in market capitalization, surpassing Apple to claim the most valuable public company globally. Microsoft’s stocks have experienced an upward trend in recent months, attributed to significant announcements in the field of AI. On the other hand, concerns regarding Apple’s iPhone sales resulted in a shift in the market value during today’s Nasdaq trading.
Microsoft temporarily surpassed Apple in market valuation, signalling a shift in the tech industry landscape. Microsoft’s stock closed 0.5% higher, reaching a market capitalisation of $2.859 trillion, while Apple closed 0.3% lower at $2.886 trillion. This momentary shift follows Microsoft’s significant strides in generative AI through its investment in OpenAI, the creator of ChatGPT.
Analysts attribute Microsoft’s growth to its rapid expansion and strategic adoption of OpenAI’s technology across its productivity software suite. The generative AI revolution has propelled Microsoft’s cloud-computing business, contributing to its impressive market performance.
In contrast, Apple is grappling with weakening demand, particularly for the iPhone, its primary revenue source. Economic challenges in China, a vital market for Apple, coupled with competition from Huawei, have led to a decline in market share and performance concerns. Several analysts have lowered their ratings for Apple in 2024, citing potential challenges in the coming years.
The stock performance comparison reveals a 3.3% decline in Apple’s shares in January, contrasting with Microsoft’s 1.8% rise during the same period. Both companies, however, are trading at relatively high share price-to-earnings (PE) ratios. Apple’s forward PE of 28 is well above its 10-year average of 19, while Microsoft’s forward PE is 31, exceeding its 10-year average of 24.
This is not the first time Microsoft has surpassed Apple in market value, having done so in 2021, 2020, and 2018 as well.
