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Microsoft is now the world's most valuable company
Microsoft becomes world’s most valuable stock as Apple dips.
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Microsoft overtakes Apple to become the world’s most valuable company
The slump in Apple Inc.’s shares on Friday propelled Microsoft Corp. to the position of the world’s largest listed company by market capitalization.
Apple fell 1.8% after reporting fourth-quarter revenue that came in below the average analyst estimate, which gave the iPhone maker a market value of $2.46 trillion. Microsoft rose 2.2% to hit a market value of $2.49 trillion, blowing past Apple after reporting estimate-topping results for an 11th straight quarter earlier this week.
“If you’re looking for safety in tech, Microsoft probably seems like a safer bet to me than Apple,” Michael Matousek, head trader at U.S. Global Investors, said in a phone interview. “If there was a downturn in the economy, I would expect Microsoft to stand up better because its products are diversified across more businesses.”
The last time Microsoft dethroned Apple was in the first half of 2020 as investors flocked into growth stocks amid the Covid-19 pandemic. Microsoft notched its best weekly gain since November.
In June, Microsoft took its place in the history books as just the second U.S. public company to reach a $2 trillion market value, buoyed by bets its dominance in cloud computing and enterprise software will expand further in a post-coronavirus world. Its shares have outperformed Apple and Amazon.com Inc. this year on expectations of long-term growth for both earnings and revenue and expansion in areas like machine learning and cloud computing. Microsoft is up more than 49%, while Apple is about 13% higher and Amazon is up more than 3%.
“Size begets size and strength begets strength. This is the sort of thing that is nice to see; Microsoft was a rock star in the 90’s — one of the four horsemen — and it has clearly gotten its mojo back,” Matousek said.
The change follows Apple’s Thursday earnings, where the company posted strong results but revealed that it lost $6 billion to supply chain constraints. On Tuesday, Microsoft also shared positive earnings boosted by Office, Windows, and its cloud products.
But Apple has been a leader in the markets for some time, being the first US company to hit a $1 trillion market cap in 2018 and, just two years later, becoming the first US company to hit a $2 trillion market cap. (The iPhone is still a massively successful product, after all.) So it’s not out of the realm of possibility that Apple retakes the title of the world’s most valuable company sometime soon.
Apple took a $6 billion hit to its sales during the fiscal fourth quarter due to persistent global supply chain problems, leading to a miss on Wall Street expectations. Top boss Tim Cook said the impact will be even worse in the current holiday sales quarter.
"Compared to less hardware-focused FAANG peers, Apple is also a lot more exposed to supply chain disruption," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
Apple's shares dropped 1.8% to end the session at $149.80, giving the company a market capitalization of $2.48 trillion. By contrast, shares of Windows software maker Microsoft rose 2.2% to a record high of $331.62, ending the session with a market capitalization of $2.49 trillion.
Microsoft's stock has surged 49% this year, with pandemic-induced demand for its cloud-based services driving sales. Shares of Apple have climbed 13% so far this year.
Apple's stock market value overtook Microsoft's in 2010 as the iPhone made it the world's premier consumer technology company.
This Microsoft reign just won't end!
Apple's throne is always in danger
Microsoft has surpassed Apple's market cap in previous instances as well. For the first time since 2010, Microsoft passed Apple's market cap in 2018 and later in July 2020.
Google's parent company Alphabet has also surpassed Apple's market cap, first in 2016. Even in the face of market fluctuations, the growth of Apple has remained uninterrupted. In 2018, the iPhone-maker became the first US company to touch a $1 trillion market cap. Following up on this achievement, Apple also became the first American company to hit the $2 trillion market cap in 2020.
Apple vs Microsoft: A never-ending war
Apple and Microsoft compete directly in a range of markets for products such as computer systems and OS, only with different approaches. Windows is Microsoft's most-used product. Apple's beloved Mac systems directly compete with Microsoft's self-made Surface laptops as well as with third-party laptops based on Windows OS.
For a short while, Microsoft also experimented with smartphones "Windows Phone" to compete with Apple's iPhone. Eventually, they realised it wasn't going to work out in their favour and phased out the entire smartphone ecosystem.
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