Microsoft
briefly overtook
Apple
as the most valuable listed company in the world on Thursday. It’s a sign of how excitement over artificial-intelligence is changing the balance of power in the technology sector.
Microsoft’s
fully diluted market cap rose to $2.875 trillion in intraday trading, surpassing Apple’s $2.873 trillion valuation.
By the time stock markets closed on Thursday, though, Apple had retaken the crown with a value of $2.89 trillion to Microsoft’s $2.86 trillion.
Apple has spent more than 500 trading days in the No. 1 spot. The last time Microsoft was ahead of Apple in terms of market valuation was November 2021, according to Dow Jones Market Data. Either Apple or Microsoft have held the largest market cap position since February 2019.
Apple fell 0.3% on Thursday to $185.59, while Microsoft rose 0.5% to $384.63.
The stocks are driven by many of the same factors, but Microsoft has performed better in recent months amid excitement over its perceived leadership in artificial-intelligence technology while Apple has been hit by concerns about how it can reignite its growth with iPhone sales declining in its latest fiscal year.
The performances of the two stocks have diverged significantly in the last three months, with Microsoft gaining 16% and Apple rising only 2%.
Microsoft rose more sharply after quarterly results in October suggested its cloud-computing growth was being accelerated by AI, as it benefits from its close relationship with ChatGPT developer OpenAI. Meanwhile, Apple has comparatively stalled with analysts questioning its lack of a public AI strategy.
Apple is hoping that its Vision Pro mixed-reality headset, set to be released in the U.S. on Feb. 2, can generate more excitement around its stock as it looks to establish its first new major product category for the company since it launched AirPods in 2016. However, a price point of $3,499 and questions over the strength of public demand for mixed-reality technology has limited expectations for sales in the short term.
Wall Street looks to be betting that while both companies will do well, Microsoft is set to cement its advantage over Apple. The average target price for Microsoft from analysts is $420.91, a 10% upside from Wednesday’s closing level. That compares with a target price of $197.58 and a 6.1% implied upside for Apple.
Write to Adam Clark at [email protected]
Read the full article here
