 |
| Microsoft overtakes Apple and becomes the most valuable company in the world |
Microsoft reclaimed the crown of the world's most valuable company from Apple, and its share price fell after the iPhone maker released a weak quarterly earnings update.
The software giant's 2.2% growth drove its market capitalization to $2.49 trillion. Apple lost 1.9% and had a market capitalization of $2.46 trillion.
The company said this week that the pandemic fueled the cloud computing boom due to the shift to remote work, and increased revenue in the third quarter.
The company's quarterly revenue rose 22%, the largest increase since 2014. We're still in the early stages of digital transformation and Microsoft is capitalizing on this trend.
The company's Azure cloud service provides a solid foundation against Amazon's main competitor, AWS.
Apple's results disappointed analysts' expectations as the outbreak of the novel coronavirus led to chip shortages and factory closures affecting production.
Since Apple first outpaced its tech rivals in 2010, Microsoft and Apple have been vying for the title of most valuable company in general circulation, continuing into 2018.
The software giant has outdone the iPhone maker in the sale triggered by the 2020 pandemic.
Since the beginning of this week, the stock price is up more than 7% and is now nearly 50% since the beginning of the year.
Microsoft regains the title of the most valuable public company
Shares of tech giant Amazon fell 2.2% after warnings that a labor shortage was driving up costs to hurt profits for the rest of the year.
The e-commerce giant has a market capitalization of $1.7 trillion and ranks fourth among the largest companies by market capitalization, after Alphabet.
The disappointing update is in stark contrast to many of the other big tech companies like Alphabet. Its strong performance helped the Nasdaq catch up with the broader stock market and break above its early September highs.
However, the index's poor performance this year shows that some investors are turning their backs on technology stocks. And the direction of the most volatile companies that will benefit from the economic recovery.
In June, Microsoft announced that it would become the second largest publicly traded company in the United States, with a market capitalization of $2,000 billion. Its dominance in cloud computing and enterprise software can be boosted by more expansionary bets in a post-coronavirus world.
Due to long-term earnings and revenue growth expectations, the stock price has outperformed Apple and Amazon this year. In addition, there is potential for expansion into areas such as machine learning and cloud computing.