Microsoft Overtakes Apple as Most Valued Company
Published on Jan 22, 2024

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On Friday, January 12th, Microsoft beat Apple as the most valuable public company in the world after the latter held the reins since 2021, with Microsoft’s market capitalization hovering at $2.89 trillion, a mere $70billion swing away from possibly falling behind Apple again which itself stands currently at a market value of $2.82 trillion.

 

A decade or so ago, starting in 2012 to be exact, the two tech giants began their push-pull dance for the world’s stock market throne. Before that, it took Apple 22 years to finally meet Microsoft’s level and lead the way to become the first company ever to amass $1 trillion in market capitalization in 2018, which was worth $3 trillion a few months ago.

 

While Apple is still largely true to the recipe that has always proved effective – developing computers and devices consumers love, with the iPhone leading its product portfolio – Microsoft, though it still develops software like the Windows operating system, is now driven by its cloud computing services, notably its Azure cloud platform, whose revenue grew by 29% in the last earnings report.

 

Earlier in 2023, Microsoft invested $10 billion in ChatGPT’s creator OpenAI, which already powers the Bing search engine, the Edge browser, the 365 document suite, Windows, and GPT-4 available on Azure through a segment called Azure OpenAI Service. Microsoft’s stock has risen by 56.8% last year and by 3.5% since the start of 2024 to reach an all-time high of $389.5.

 

Similarly, Apple's stock price skyrocketed in 2023, increasing by 48.2%, and ticked to its highest closing level of $197.64 last December. Yet it has fallen by 8.49% despite releasing its new iPhone 15 lineup last September.

 

iPhone 15 Pro models come with some of Apple’s best innovations yet, including one of the world's most powerful chips capable of rapidly processing artificial intelligence workloads of any smartphone, which analysts expect to lift the company’s sales in the current quarter after falling for three consecutive quarters. But fears of the staggering demand for smartphones globally, especially in China, still heavily linger over Apple and the industry at large.

It is impossible to predict whether or not Microsoft will keep the lead over Apple for the long or even the short run. Still, many analysts predict Microsoft will maintain a $94 trillion lead over Apple in the foreseeable future with an estimated market cap of $3.16 trillion and $3.07 trillion, respectively.

 

These calculations largely stem from the view that AI would be the major driver for long-term financial opportunities in the market, with Goldman Sachs predicting AI to add $7 trillion to the global economy by 2030, giving many analysts the idea that Microsoft's lead will last for a while.


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