Microsoft Takes the Lead as the World’s Most Valuable Company, Surpassing Apple
On January 12, 2024, Microsoft became the world’s most valuable company with a market capitalization of $2.89 trillion, surpassing Apple’s market capitalization of $2.87 trillion. This marked the first time Microsoft had overtaken Apple since November 2021.
Microsoft’s increase in market value of more than $1 trillion over the past year can be attributed to several factors. Firstly, the company’s Copilot for Microsoft 365, an AI-powered Office document service, has been received positively by the market. The service’s high price point has been seen as indicative of Microsoft’s ability to innovate and remain competitive in the technology sector.
Secondly, Microsoft’s incorporation of OpenAI’s technology into its productivity software has been seen as a significant move for the company’s cloud computing business. The incorporation of OpenAI’s technology has allowed Microsoft to improve its artificial intelligence capabilities, which has in turn increased the demand for its cloud computing services.
Overall, Microsoft’s rise to the top of the market capitalization rankings can be attributed to its ability to innovate and remain competitive in a rapidly evolving technology sector.
It has been reported that Microsoft has recently surpassed Apple to become the world’s most valuable company. This news is a testament to the success of Microsoft’s recent business strategies and innovations in the technology industry. It will certainly be fascinating to observe how both companies continue to challenge and learn from one another in the future. On Friday, Microsoft’s stock market value ended a trading session higher than Apple’s for the first time since 2021. This made Microsoft the world’s most valuable company, with a market capitalization of $2.887 trillion, its highest ever, according to London Stock Exchange Group (LSEG) data. In contrast, Apple’s shares have dropped 3% in 2024 due to concerns about smartphone demand, despite a 48% rally in 2023.
Microsoft’s shares have increased by about 3%, driven by its investment in OpenAI and its incorporation of OpenAI’s technology across its suite of productivity software. This move has helped spark a rebound in Microsoft’s cloud-computing business in the July-September quarter and created an opportunity for the company to challenge Google’s dominance of web search.
In contrast, Apple is facing tepid demand, particularly for its iPhone, due to China’s slow recovery from the COVID-19 pandemic and Huawei’s resurgence. Apple’s recent sales forecast for the holiday quarter missed Wall Street expectations due to weak demand for iPads and wearables. However, analysts predict that Apple’s revenue will increase by 0.7% to $117.9 billion in the December quarter, marking its first year-on-year increase in four quarters.
Both Apple and Microsoft are trading at high prices relative to their expected earnings, indicating a high valuation of the companies. Apple’s forward PE is 28, above its 10-year average of 19, while Microsoft’s PE is 32 times, above its 10-year average of 24.
Despite their high valuations, Microsoft has briefly surpassed Apple as the most valuable company since 2018, with concerns about supply chain shortages in 2021 impacting Apple’s stock price. However, Microsoft’s recent rise to the top can be attributed to its ability to innovate and remain competitive in the technology sector, as well as its investment in AI-powered software and cloud computing.
Overall, Microsoft’s recent rise to become the world’s most valuable company, surpassing Apple, can be attributed to its continued investment in AI-powered software and cloud computing. Microsoft’s incorporation of OpenAI’s technology across its suite of productivity software and its ability to innovate and remain competitive in the technology sector has helped it achieve this milestone. On the other hand, Apple is facing challenges due to tepid demand, particularly for its iPhone, due to China’s slow recovery from the COVID-19 pandemic and Huawei’s resurgence. Despite their high valuations, both companies are trading at high prices relative to their expected earnings. Nonetheless, Microsoft’s recent stock market value surpassing Apple’s is a significant achievement and demonstrates the company’s continued growth and success in the technology industry.
