On Thursday, Microsoft, for a brief period, surpassed Apple as the world’s most valuable company for the first time since 2021, after shares of the iPhone maker had a weak start this year due to growing concerns about demand, according to a Reuters report.
Microsoft’s shares have climbed sharply since last year, thanks to its early foray into the generative artificial intelligence field through its investment in OpenAI, the developer of the popular chat program ChatGPT.
Microsoft’s stock closed up 0.5%, giving it a market valuation of $2.859 trillion. During the session, it rose by as much as 2%, momentarily reaching a market value of $2.903 trillion.
In contrast, Apple’s shares closed down 0.3%, giving the company a market capitalization of $2.886 trillion. Microsoft and Apple have been vying for the top spot over the years.
Analyst Davidson Gil Luria said, “It was inevitable for Microsoft to overtake Apple because Microsoft is growing faster and has more to gain from the generative AI revolution,” according to the report.
Microsoft has integrated OpenAI’s technology across its suite of productivity software, a move that has helped revitalize its cloud computing business in the quarter from July to September.
Meanwhile, Apple has been experiencing weak demand, including for the iPhone, its biggest cash cow. Demand has waned in China, a key market, as the country’s economy slowly recovers from the pandemic and as Huawei loses market share.
Apple’s stock, which peaked at a market capitalization of $3.081 trillion on December 14 last year, ended the year with gains of 48% (Shutterstock).
Redburn Atlantic brokerage said in a client note on Wednesday, “China could pose a barrier to performance over the coming years,” and downgraded Apple’s stock to “neutral.”
At least three out of 41 analysts covering Apple have lowered their ratings since the start of 2024.
Apple shares, based in Cupertino, California, fell 3.3% in January as of the last closing, compared to a 1.8% rise for Microsoft.
Both stocks are considered expensive in terms of their price-to-earnings ratio, a common method for evaluating publicly traded companies.
Microsoft held the lead as the most valuable company briefly over Apple several times since 2018, including in 2021 when concerns about a supply chain shortage due to the coronavirus impacted the share price of the iPhone maker, which was less than Microsoft’s 57% rise.
