Microsoft briefly surpassed Apple on Thursday as the world’s most valuable company for the first time since 2021, as Apple’s iPhone manufacturing company started the year with a weak performance due to increasing concerns about demand, according to a Reuters report.
Microsoft’s stocks have sharply risen since last year, thanks to its early entry into the generative artificial intelligence field through its investment in OpenAI, the developer of the popular “ChatGPT” chatbot.
Microsoft’s stock closed up by 0.5%, giving it a market valuation of $2.859 trillion. It rose by up to 2% during the session, briefly reaching a value of $2.903 trillion. On the other hand, Apple’s stocks closed down by 0.3%, giving the company a market value of $2.886 trillion. Microsoft and Apple have been competing for the top position over the years.
Analyst Davidson Gill Loria mentioned, “It was inevitable for Microsoft to surpass Apple because Microsoft is growing faster and has more benefits from the generative artificial intelligence revolution,” according to the report.
Microsoft integrated OpenAI’s technology into its suite of productivity software, a move that helped boost cloud computing business in the quarter from July to September. At the same time, Apple faced weakened demand, including a decline in demand for the iPhone, its biggest cash cow. Demand fell in China, a key market, as the country’s economy slowly recovered from the pandemic, and Huawei lost market share. Redburn Atlantic Financial Intermediation said in a note to clients on Wednesday, “China may pose a headwind to performance in the coming years,” and downgraded Apple’s stock to “neutral.”
At least three out of 41 analysts covering Apple have downgraded their ratings since the beginning of 2024. Apple’s stock, headquartered in Cupertino, California, fell by 3.3% in January compared to a 1.8% rise in Microsoft’s stock as of the recent closing. Both stocks are considered expensive in terms of price-to-earnings ratio, a common method for evaluating publicly traded companies.
Apple’s stocks, which peaked at a market value of $3.081 trillion on December 14 last year, ended the year with gains of 48%, less than the 57% increase recorded by Microsoft. Microsoft briefly took the lead over Apple as the most valuable company several times since 2018, including in 2021 when concerns about supply chain shortages due to the coronavirus impacted the iPhone manufacturer’s stock price.
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