Last updated on March 23rd, 2024 at 06:42 am

With market capitalizations close at $2.887 trillion and $2.875 trillion, Microsoft edges ahead due to concerns about iPhone sales

On Friday, Microsoft’s stock market value surpassed Apple’s for the first time since 2021, making it the world’s most valuable company. Concerns about demand impacted Apple’s shares, leading to a 0.2% increase, while Microsoft saw a 1% rise. Microsoft’s market capitalization reached $2.887 trillion, its highest ever according to LSEG data, while Apple’s market capitalization was $2.875 trillion based on data from a Thursday filing.

Concerns about smartphone demand have caused Apple’s shares to decline by 3% so far in 2024, following a 48% increase last year. Microsoft, on the other hand, has risen by about 3% year-to-date after surging 57% in 2023. This surge was partially driven by its leadership in generative artificial intelligence, stemming from an investment in OpenAI, the creator of ChatGPT.

Apple’s market capitalization reached its peak at $3.081 trillion on December 14, according to LSEG.

Microsoft has integrated OpenAI’s technology across its range of productivity software, contributing to a resurgence in its cloud computing business in the July-September quarter. Its AI advancement has also positioned it to challenge Google’s dominance in web search.

Apple, on the other hand, has been dealing with weak demand, particularly for the iPhone, which is its main revenue driver. Demand in China, a key market, has declined as the country’s economy slowly recovers from the Covid-19 pandemic, and Huawei’s resurgence has eaten into Apple’s market share.

The sales of Apple’s Vision Pro mixed-reality headset will begin on February 2 in the United States, marking Apple’s largest product launch since the iPhone in 2007. However, UBS estimated in a report this week that Vision Pro sales would have a “relatively minor impact” on Apple’s earnings per share in 2024.

Several times since 2018, Microsoft has briefly surpassed Apple as the most valuable company, with the most recent instance occurring in 2021. During that period, concerns about supply chain shortages linked to the pandemic affected Apple’s stock price.

In its latest quarterly report in November, Apple provided a sales forecast for the holiday quarter that fell short of Wall Street’s expectations, primarily due to weak demand for iPads and wearables.

Analysts, on average, expect Apple to report a 0.7% revenue increase to $117.9 billion for the December quarter, according to LSEG. This would represent Apple’s first year-on-year revenue growth in four quarters. Apple is scheduled to announce its results on February 1.

Meanwhile, analysts anticipate Microsoft to announce a 16% revenue increase to $61.1 billion, driven by continued growth in its cloud business, when it reports its results in the upcoming weeks.