In a notable shift, Microsoft briefly dethroned Apple on Thursday, January 11, becoming the world’s most valuable company for the first time since 2021. The surge in Microsoft’s market value was driven by a 0.7% boost, reaching $2.865 trillion, with a 2% increase pushing it to $2.903 trillion.
This achievement comes on the heels of Microsoft’s strategic investment in OpenAI, the creator of ChatGPT, contributing to the tech giant’s lead in generative artificial intelligence. The incorporation of OpenAI’s technology into Microsoft’s software has resulted in a significant rebound in its cloud-computing business.
Meanwhile, Apple experienced a 0.9% decline in its shares, leading to a market capitalization of $2.871 trillion. Analysts note that Microsoft’s faster growth and deeper involvement in the generative AI revolution have positioned it for overtaking Apple.
Gil Luria, an analyst at DA Davidson, stated, “It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution.”
Apple faces challenges with a slump in demand for its devices, particularly the iPhone, a major revenue driver. Slow recovery in China, a key market, has contributed to decreased demand, and a resurgent Huawei poses competition for market share in the country.
“China could be a drag on performance over the coming years,” noted brokerage Redburn Atlantic in a recent client note, leading to a downgrade of Apple’s shares to “neutral.”
In January alone, Apple’s shares have declined by 3.3%, while Microsoft has seen a 1.8% increase. Apple’s market capitalization peaked at $3.081 trillion on December 14, 2023. Microsoft has intermittently overtaken Apple in terms of market value since 2018, with Apple’s stocks facing challenges in 2021 due to Covid-related concerns about supply chains.
The positive sentiment on Wall Street regarding Microsoft is evident, with nearly 90% of brokerages covering Microsoft recommending buying the stock, according to Reuters.
