Microsoft Beats Apple to Become World’s Most Valuable Company
Microsoft reportedly overtook Apple as the world’s most valuable company on Thursday after the iPhone maker’s shares made a weak start to 2024 due to growing concerns over demand.
Shares of Redmond, Washington-based Microsoft were last up 1.6 percent, giving it a market valuation of $2.875 trillion as its early lead in the race to make money from generative artificial intelligence helped draw investors.
Apple, on the other hand, was 0.9 percent lower with a market capitalization of $2.871 trillion – the first time since 2021 that its valuation has fallen below that of Microsoft.
The Cupertino, California-based company’s stock has slid 3.3 percent in January as of last close, compared with a 1.8 percent rise in Microsoft.
“It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution,”, Reuters reported, quoting D.A. Davidson, analyst Gil Luria.
The weakness in Apple stock follows a series of rating downgrades that fanned worries that sales of the iPhone, its biggest cash cow, would stay weak, especially in major market China.
“China could be a drag on performance over the coming years,” brokerage Redburn Atlantic said in a client note on Wednesday, pointing to competition from a resurgent Huawei and Sino-US tensions that have increased pressure on Apple.
The brokerage added Apple’s services business – a bright spot in recent quarters – faces threats as regulators deepen scrutiny of a lucrative deal that makes Google the default search engine on iOS.
Shares of Apple, whose market capitalization peaked at $3.081 trillion on December 14, ended last year with a gain of 48 percent.
That was lower than the 57 percent rise posted by Microsoft, which aggressively rolled out genAI-powered tools in 2023 thanks to its tie-up with ChatGPT-maker OpenAI.
Microsoft has briefly taken the lead over Apple as the most valuable company a handful of times since 2018, most recently in 2021 when concerns about COVID-driven supply chain shortages hit the iPhone maker’s stock price.
