Microsoft Overtakes Apple as World’s Most Valuable Company

Microsoft overtakes Apple in stock market value, reaching $2.89 trillion, the highest ever. Boosted by AI success, Microsoft’s rise contrasts Apple’s 3% dip due to iPhone demand worries. Microsoft’s strategic AI investments, including in ChatGPT through OpenAI, have fueled its growth, while Apple faces challenges in China and tepid demand.

Microsoft Overtakes Apple to Become World’s Most Valuable Company

Market Lead Shifts as Apple Faces Demand Woes, Microsoft Shines with AI

Seattle, WA – January 13, 2024

In a historic milestone, Microsoft surpassed Apple in market capitalization on Friday, reclaiming the title of the world’s most valuable company for the first time since 2021.

Microsoft has emerged as the world’s most valuable publicly traded company, surpassing Apple in market capitalization. This milestone was achieved as Apple’s shares faced a 3% decline amid concerns about weakening demand, particularly for the iPhone. Microsoft’s steady ascent has been fueled by its success in generative artificial intelligence.

Microsoft Overtakes Apple to Become World’s Most Valuable Company

Market Capitalization Milestone

On Friday, Microsoft’s stock (MSFT) closed at $388.47 a share, reaching a record market capitalization of $2.89 trillion. In contrast, Apple’s stock (AAPL) closed at $185.92 a share, yielding a market capitalization of $2.87 trillion. Market capitalization, representing the total value of a company’s publicly traded shares, now places Microsoft at the forefront globally.

Microsoft’s Rise Fueled by AI Success

Microsoft’s climb to the top spot comes on the heels of a stellar year, buoyed by its achievements in generative artificial intelligence. The tech giant has integrated OpenAI’s technology into its suite of productivity software, triggering a resurgence in its cloud-computing business. This move has also positioned Microsoft to challenge Google’s dominance in web search.

Apple’s Struggles in a Changing Landscape

Apple, on the other hand, has grappled with diminished demand, notably in China, a key market where economic recovery from the Covid-19 pandemic has been gradual. The surge of Huawei, coupled with reported efforts by the Chinese government to restrict iPhone purchases, has impacted Apple’s market share.

Sales of Apple’s much-anticipated Vision Pro mixed-reality headset, set to launch on February 2 in the United States, are eagerly awaited. However, a recent report by UBS suggests that the impact on Apple’s earnings per share in 2024 may be relatively minimal.

Financial Outlook for Both Giants

Analysts forecast a 0.7% year-on-year revenue increase for Apple in the December quarter, reaching $117.9 billion. This would mark the first revenue increase in four quarters for the tech giant, whose sales forecast for the holiday quarter fell short of Wall Street expectations.

In contrast, Microsoft is expected to report a robust 16% increase in revenue to $61.1 billion. The continued growth in its cloud business has been a significant contributor to Microsoft’s financial success.

Strategic Moves by Microsoft CEO Satya Nadella

In 2023, Microsoft’s CEO, Satya Nadella, made a strategic multi-billion dollar investment in artificial intelligence. This investment involved the commercialization and integration of AI tools, including the widely acclaimed ChatGPT, into Microsoft’s suite of products ahead of competitors.

Nadella strengthened Microsoft’s collaboration with OpenAI, a pioneering force in artificial intelligence, during a period of leadership changes at the smaller company in late 2023.

Apple Faces Challenges on Multiple Fronts

In addition to sluggish iPhone sales, Apple faced a temporary ban on selling its latest Apple Watch models in the United States. These challenges have contributed to a complex landscape for Apple, requiring strategic adjustments in a rapidly evolving market.

Both Microsoft and Apple are set to report their financial results in the coming weeks, providing further insights into their performance and strategies in the highly competitive tech industry. Investors and industry observers will be closely monitoring these developments as the dynamics of global technology leadership continue to evolve.

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Image: The Next Web; Source(s): CNN; The Guardian

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