Company excelled Microsofton Thursday, briefly for company Camel As the most valuable company in the world for the first time since 2021, after the shares of the iPhone manufacturer got off to a weak start to the year due to growing concerns about demand, according to a Reuters report.
Microsoft shares have risen sharply since last year, thanks to its early entry into the field of generative artificial intelligence by investing in OpenAI, the company that developed the famous chat program “ChatGPT”.
Microsoft shares closed up 0.5%, giving it a market valuation of $2.859 trillion. It rose as much as 2% during the session and the company's value briefly reached $2.903 trillion.
Apple shares closed 0.3% lower, giving the company a market value of $2.886 trillion. Microsoft and Apple have been competing for first place over the years.
“It was inevitable that Microsoft would overtake Apple, because Microsoft is growing faster and has more to benefit from the generative AI revolution,” Davidson analyst Gil Loria said, according to the report.
Microsoft has integrated OpenAI technology across its productivity software suite, a move that helped spark a rebound in its cloud computing business in the July-September quarter.
Meanwhile, Apple has been struggling with weak demand, including for the iPhone, its biggest cash cow. Demand has declined in China, a key market, as the country's economy slowly recovers from the pandemic and Huawei loses market share.
“China may pose a drag on performance over the coming years,” brokerage Redburn Atlantic said in a note to clients on Wednesday, and downgraded Apple's stock rating to “neutral.”
At least three out of 41 analysts covering Apple have lowered their ratings since the start of 2024.
Shares of Apple, headquartered in Cupertino, California, fell by 3.3% in January as of the last close, compared to a 1.8% rise in Microsoft.
Both stocks are considered expensive in terms of their price-to-earnings ratio, which is a common way of valuing publicly listed companies.
Apple shares, whose market value peaked at $3.081 trillion on December 14, ended last year with gains of 48%. This was less than the 57% increase recorded by Microsoft.
Microsoft has briefly held the lead over Apple as the most valuable company a few times since 2018, including in 2021 when concerns about supply chain shortages due to the coronavirus weighed on the iPhone maker's stock price.