Microsoft’s stock market capitalization ended a trading session higher than that of Apple for the first time since 2021 on Friday, making it the world’s most valuable company as concerns about demand weighed on the iPhone maker’s shares.
Apple shares rose 0.2% on Friday, while Microsoft added 1%. Thus, Microsoft’s market value reached $2.887 trillion, its highest level ever, according to LSEG data. Apple’s market value was $2.875 trillion, calculated based on data from Thursday’s filing.
Concerns about demand for smartphones have pushed Apple shares down 3% so far in 2024 after rising 48% last year. Microsoft shares are up about 3% year to date after rising 57% in 2023 in a rally driven in part by its leadership in generative AI through investment in OpenAI, which makes ChatGPT.
Apple’s market cap peaked at $3.081 trillion on December 14, according to LSEG.
Microsoft has integrated OpenAI technology across its productivity software suite, a move that helped spark a rebound in its cloud computing business in the July-September quarter. Its AI leadership has also created an opportunity to challenge Google’s dominance in web search.
Meanwhile, Apple has been grappling with tepid demand, including demand for the iPhone, its cash cow. Demand has fallen in China, a key market, as the country’s economy slowly recovers from the Covid-19 pandemic and its market share erodes due to the resurgence of Huawei.
Sales of Apple’s Vision Pro mixed reality headset begin on February 2 in the US, marking Apple’s biggest product launch since the iPhone in 2007. However, UBS estimated in a report this week that Vision Pro sales will be “relatively insignificant” for Apple . Earnings per share in 2024
Several times since 2018, Microsoft has briefly held the lead over Apple as the most valuable company, most recently in 2021, when concerns about supply chain shortages related to the pandemic weighed on the iPhone maker’s stock price.
In its most recent quarterly report in November, Apple provided a sales forecast for the holiday quarter that fell short of Wall Street expectations, hurt by weak demand for iPads and wearables.
Analysts on average expect Apple’s revenue to rise 0.7% to $117.9 billion in the December quarter, according to LSEG. This would mark the first year-over-year revenue increase in four quarters. Apple announces its results on February 1.
Analysts see Microsoft reporting a 16% increase in revenue to $61.1 billion, supported by continued growth in its cloud business when it announces in the coming weeks.