Microsoft Set to Exceed Apple as World’s Most Valuable Company

In a remarkable turn of events, Microsoft is set to surpass Apple as the world’s most valuable company. The latest market development indicates a dip in Apple’s stock, driven by concerns over iPhone sales.

Microsoft has heavily invested in artificial intelligence research and development to position itself for future technological advancements. On top of that, Microsoft Azure has emerged as a strong competitor to Amazon Web Services (AWS) in the cloud computing market, catering to businesses of all sizes with various cloud services.

Who Stands Where at World’s Most Valuable Company List

Apple experienced a 4% decline in shares in 2024, starkly contrasting with the remarkable 48% rally last year. This has created an opportunity for Microsoft, whose shares have risen by 2% this year, building on a 57% surge in 2023. On Wednesday, Apple’s shares dipped by 0.4%, while Microsoft’s surged by 1.6%, further decreasing the gap between the two tech giants. Apple’s current market value is $2.866 trillion, with Microsoft at $2.837 trillion. Here’s a list of the top 10 World’s Most Valuable Companies as of February 11, 2024:

1. Apple
2. Microsoft
3. Saudi Aramco
4. Alphabet (Google)
5. Amazon
6. NVIDIA
7. Meta Platforms (Facebook)
8. Berkshire Hathaway
9. Tesla
10. Eli Lily

China’s Impact on iPhone Sales

As per Jefferies analysts, iPhone sales have dropped by 30% in China during the first week of 2024. This indicates increasing competition from domestic rivals, notably Huawei.

To regain momentum, Apple is set to launch its Vision Pro mixed-reality headset on February 2 in the United States. This is Apple’s biggest product launch since the iPhone in 2007. However, a report from UBS suggests that Vision Pro sales may have a limited impact on Apple’s earnings per share in 2024.

Historical Market Peaks

Apple reached its market capitalization peak at $3.081 trillion on December 14, while Microsoft hit a high of $2.844 trillion on November 28. Microsoft has previously surpassed Apple as the most valuable company, notably in 2021, during concerns over COVID-19-related supply chain shortages affecting Apple’s stock price.

Both tech giants are currently trading at relatively high in terms of price-to-earnings ratios. Apple’s forward PE stands at 28, significantly above its 10-year average of 19. Microsoft is trading around 31 times forward earnings, surpassing its 10-year average of 24, according to LSEG data.

Analysts predict Apple is projected to report a 0.7% revenue increase to $117.9 billion for the December quarter, marking its first year-on-year growth in four quarters. Apple is scheduled to report its results on February 1. Meanwhile, Microsoft is expected to announce a 16% revenue surge to $61.1 billion, driven by ongoing cloud business expansion, with results due in the coming weeks.

Investors and industry experts are closely monitoring this race for market dominance, anticipating potential impacts on the tech sector.

WRITTEN BY

Team Eela

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