Microsoft has overtaken Apple to become the world's most valuable publicly traded company for the first time since 2021 after shares of the iPhone maker saw a weak start to the year amid growing concerns about demand.
Microsoft shares have risen sharply since last year, thanks to the company's leadership in generative artificial intelligence through its investment in OpenAI, which developed ChatGPT.
Microsoft shares closed up 0.5%, valuing the company at $2.859 trillion.
The stock rose 2% on the Nasdaq, giving the company a market value of $2.903 billion.
Apple shares closed down 0.3%, giving the company a market value of $2.886 trillion.
Microsoft and Apple have been competing for the top spot for years.
Analysts point out that Microsoft is bound to outperform Apple. Because it is experiencing rapid growth and greatly benefiting from the generative artificial intelligence revolution.
Microsoft is adding OpenAI technology to its productivity software suite, a move that could help spur a recovery in its cloud computing business in the third quarter of 2023.
On the other hand, Apple is suffering from weak demand, especially for iPhones, which are its main source of revenue.
Demand has fallen in China as the country's economy slowly recovers from the outbreak and Huawei regains market share.
Brokerage Redburn Atlantic said in a note to clients that “China is likely to underperform Apple in the coming years” and downgraded its rating on Apple shares to “neutral.”
Since the beginning of 2024, many analysts covering Apple stock have lowered their ratings, causing the company to lose approximately $162 billion in market value in 2024 alone.
Apple shares fell 3.3% in January, while Microsoft shares rose 1.8%.
Both stocks are highly valued in terms of price-to-earnings ratios, which is a common way to value publicly traded companies.
Apple shares, which peaked at $3.081 billion on December 14, closed up 48% last year, while Microsoft shares rose 57% last year.
Microsoft has been briefly in the spotlight as the world's most valuable company several times since 2018, most recently in 2021 when concerns about supply chain shortages related to the coronavirus pandemic weighed on its stock price. iPhone maker shares.
Analysts are now positive on Microsoft, and brokerage firms analyzing the company's shares are recommending buying the stock.