This is the first episode since 2021 in which the valuation of the Manzanita company is below that of the Redmond, Washington firm.
In a surprising turn in the ranking of mega-cap companies, Microsoft surpassed Apple as the world’s most valuable company on Thursday. This change came after the shares of the Cupertino technology giant will experience a weak start in 2024raising concerns about demand for its flagship iPhones.
Shares of Redmond, Washington-based Microsoft, by contrast, rose 1.6%, reaching a staggering market valuation of $2.875 trillion. This achievement is attributed to the strategic advantage that Microsoft has maintained in the race to capitalize on generative artificial intelligence.which has strongly attracted investors.
In contrast, Apple experienced a drop of 0.9%, with a market capitalization of $2.871 billion. This is the first episode since 2021 in which Apple’s valuation is below that of Microsoft.
Financial analysts point to Microsoft’s rapid expansion and its prime position to benefit from the generative artificial intelligence revolution as key factors in its rise. DA Davidson analyst Gil Luria noted: “It was inevitable that Microsoft would overtake Apple, as Microsoft is growing faster and has the most to benefit from the generative AI revolution.”
Bigtech: the data observed by the market
Weakness in Apple shares was triggered by a series of rating downgrades, stoking concerns about iPhone sales, especially in the crucial Chinese market. Brokerage Redburn Atlantic pointed to competition from Huawei and tensions between China and the United States as factors that could affect Apple’s future performance.
Besides, Regulatory threats to Apple’s services businessparticularly in relation to the agreement with Google to be the default search engine on iOS, have generated uncertainty in the market.
Even though Apple stock closed last year up an impressive 48%, lagging slightly behind Microsoft’s impressive 57%, The current dynamic reflects a shift in Wall Street confidence. Microsoft, which has sporadically led the list of most valuable companies since 2018, now enjoys a more positive perception, with no “sell” forecast and almost 90% of brokers recommending its shares to buy.
However, both companies face relatively high valuations in terms of price relative to projected earnings. Apple is trading at 28 times expected earnings, well above its historical average of 19 times over the last decade, while Microsoft is at around 31 times expected earnings, surpassing its 10-year average of 24 times. according to LSEG data. With these figures in mind, the market is closely monitoring the development of both companies as they navigate the competitive world of technology.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
