In a stunning turn of events, Microsoft briefly wrested the crown of the world’s most valuable company from Apple on Thursday, marking the first time since 2021 that Apple had relinquished the top spot.
This shift comes amidst growing concerns about iPhone demand and Apple’s recent woes, while Microsoft basks in the sunshine of early success in generative AI.
Microsoft’s shares have been on a tear since last year, propelled by its strategic investment in OpenAI, the creators of ChatGPT, a leading generative AI technology.
This early lead in the AI race has translated into tangible gains, with Microsoft’s stock climbing 0.7% on Thursday and briefly touching $2.903 trillion in market value.
Meanwhile, Apple’s stock dipped 0.9%, dragging its market capitalization to $2.871 trillion.
The iPhone maker has been grappling with weakening demand, particularly in China, where Huawei’s resurgence is chipping away at its market share.
Additionally, a sluggish economic recovery in the country further casts a shadow on Apple’s future prospects.
The bearish sentiment has found its way into analyst reports, with Redburn Atlantic downgrading Apple’s shares to “neutral” and citing China as a potential drag on performance.
At least three of the 41 analysts covering Apple have lowered their ratings since the start of 2024, reflecting a growing uncertainty surrounding the company’s trajectory.
While both Microsoft and Apple boast hefty price-to-earnings ratios, indicating premium valuations, their recent performances diverge significantly.
Apple’s stock has dropped 3.3% in January alone, compared to Microsoft’s modest 1.8% gain.
This disparity underscores the shifting momentum in the tech landscape, with investors seemingly favoring Microsoft’s AI-driven growth narrative over Apple’s recent struggles.
