Amidst market caps of $2.887tn and $2.875tn, Microsoft edges ahead on concerns about iPhone sales
On Friday, Microsoft’s stock market value surpassed Apple’s for the first time since 2021, securing its position as the world’s most valuable company. Apple inched up 0.2%, while Microsoft gained 1%, reaching its highest-ever market capitalization at $2.887tn, according to LSEG data. Apple’s market capitalization, based on Thursday’s filing, stood at $2.875tn. The shift was fueled by concerns about iPhone demand impacting Apple’s shares.
Concerns regarding smartphone demand have caused a 3% decline in Apple’s shares in 2024, following a notable 48% surge last year. In contrast, Microsoft has seen a 3% increase year-to-date, building on a remarkable 57% surge in 2023, attributed in part to its leadership in generative artificial intelligence, notably through an investment in OpenAI, the creator of ChatGPT.
On December 14, Apple achieved 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 sector during the July-September quarter. This AI advantage has also positioned Microsoft to challenge Google’s dominance in web search.
On the other hand, Apple is contending with subdued demand, particularly for its flagship product, the iPhone. In China, a crucial market, demand has dwindled amid the country’s gradual economic recovery from the Covid-19 pandemic, coupled with the resurgence of Huawei, which is eating into Apple’s market share.
The sales of Apple’s Vision Pro mixed-reality headset are set to commence on February 2 in the United States, marking the company’s most significant product launch since the iPhone in 2007. However, according to a recent UBS report, Vision Pro sales are projected to have a “relatively immaterial” impact on Apple’s earnings per share in 2024.
Several times since 2018, Microsoft has temporarily surpassed Apple as the most valuable company, notably in 2021 when concerns about pandemic-related supply-chain shortages impacted Apple’s stock.
In its latest quarterly report in November, Apple provided a sales forecast for the holiday quarter that fell short of Wall Street expectations, primarily due to weak demand for iPads and wearables.
According to LSEG, analysts, on average, anticipate Apple to report a 0.7% year-on-year revenue increase to $117.9bn for the December quarter. If realized, this would mark its first revenue growth in four quarters. Apple is scheduled to release its results on February 1.
Analysts are projecting Microsoft to announce a 16% revenue boost to $61.1bn in the upcoming weeks, driven by sustained growth in its cloud business.