With market caps close at $2.887tn and $2.875tn, Microsoft edges ahead amid concerns about iPhone sales
Microsoft’s market value surpassed Apple’s in a trading session for the first time since 2021 on Friday, becoming the world’s most valuable company as concerns about demand affected Apple’s shares.
On Friday, Apple inched up by 0.2%, whereas Microsoft gained 1%. Consequently, Microsoft achieved its highest-ever market capitalization at $2.887tn, as per LSEG data. Apple’s market capitalization, based on Thursday’s filing, was $2.875tn.
Concerns regarding smartphone demand have led to a 3% decline in Apple’s shares in 2024, following a 48% surge last year. Meanwhile, Microsoft has seen a 3% increase year-to-date, building on a 57% surge in 2023. This rise was propelled, in part, by its leadership in generative artificial intelligence, facilitated by an investment in ChatGPT-maker OpenAI.
On December 14, Apple reached its highest market capitalization at $3.081tn, as reported by LSEG.
Microsoft has integrated OpenAI’s technology into its range of productivity software, contributing to a resurgence in its cloud-computing business during the July-September quarter. This AI advantage has also positioned Microsoft to compete with Google’s dominance in web search.
On the other hand, Apple is facing challenges with subdued demand, particularly for its flagship product, the iPhone. Demand in China, a significant market for Apple, has declined as the country’s economy undergoes a gradual recovery from the impact of the Covid-19 pandemic, and increased competition from resurging Huawei is diminishing Apple’s market share.
The launch of Apple’s Vision Pro mixed-reality headset is scheduled for February 2 in the United States, representing Apple’s most significant product debut since the iPhone in 2007. Despite this, a recent report from UBS estimates that sales of the Vision Pro will have a “relatively immaterial” impact on Apple’s earnings per share in 2024.
Several times since 2018, Microsoft has briefly surpassed Apple as the most valuable company, with the most recent occurrence in 2021. This shift occurred as concerns about supply-chain shortages related to the pandemic affected the stock price of the iPhone maker.
In its latest quarterly report in November, Apple provided a sales forecast for the holiday quarter that fell below Wall Street expectations, primarily due to weak demand for iPads and wearables.
According to LSEG, analysts, on average, anticipate Apple to report revenue growth of 0.7% to $117.9bn for the December quarter. This would signify its first year-on-year revenue increase in four quarters. Apple is set to release its results on February 1.
Analysts project Microsoft to reveal a 16% revenue increase to $61.1bn in the upcoming weeks, buoyed by sustained growth in its cloud business.
