Microsoft has surpassed Apple as the world’s most valuable firm by market capitalization.
As of the closing of business on January 12, Apple shares were up 0.2%, while Microsoft shares were up 1%. As a consequence, Microsoft’s market capitalization has achieved an all-time high of $2.887 trillion. Apple’s current market value is $2.875 trillion.
Concerns over smartphone demand have knocked down Apple shares by 0.6% this year, after they surged as high as 48% last year. In comparison, Microsoft’s stock has climbed 4% after surging 57% last year. Investors are optimistic about the software behemoth following Microsoft’s investment in OpenAI, the parent firm of ChatGPT.
Microsoft has included OpenAI’s artificial intelligence technology in its software. This decision enabled their cloud computing business to return substantially in the third quarter of 2023. Leading in AI also allows Microsoft to challenge Google’s supremacy in the search market.
On the other side, Apple is experiencing low demand, particularly for the iPhone, the company’s moneymaker. Demand in China is weak since the economy has yet to completely recover from Covid-19. In addition, Apple is experiencing increased competition from Huawei in the nation.
The Vision Pro glasses will be available in the United States on February 2, marking Apple’s most significant product launch since the iPhone was introduced in 2007. However, a forecast from UBS bank earlier this week indicated that Vision Pro sales will have a “negligible” influence on Apple’s EPS (profits per share) for the year.
Since 2018, Microsoft has momentarily surpassed Apple as the world’s most valuable firm numerous times. The most recent instance occurred in 2021, owing to fears about supply chain disruptions during the epidemic.
According to Apple’s most recent financial report, which was issued in November 2023, the firm predicted that Christmas sales would fall short of Wall Street estimates. The explanation is that the demand for iPads and wearable gadgets is declining.
Analysts estimate Apple’s sales in the fourth quarter of last year might rise 0.7% to $117.9 billion. This would be the first time in four quarters that the company’s revenue has increased over the previous year. Apple will report its financial results on February 1.
Meanwhile, Microsoft’s revenue is forecast to rise 16%, to $61.1 billion. The reason is that the cloud computing market is rapidly expanding. The company’s financial results will also be announced in the following weeks.
