Microsoft overtook Apple to become the company with the highest market value in the world on Thursday (11). Microsoft came up with an estimated figure of $2.888 trillion, versus Apple’s $2.887 trillion. Although brief, the overtaking reflects the choices of the two companies throughout 2023. Microsoft has bet on artificial intelligence, putting features of this type in practically all of its products. Apple, on the other hand, had weak sales in several segments, and could still lose a billion-dollar contract with Google.
Apple became the world’s most market-capped company in 2011 when it surpassed oil company ExxonMobil. Since then, it has been the first to hit the $1 trillion, $2 trillion and $3 trillion marks. In addition, she remained in the lead most of the time, being outclassed only in brief intervals. Microsoft itself overtook Apple in 2018, 2020, and 2021.
Artificial intelligence adds value to Microsoft
Microsoft stock has performed great in 2023, accumulating a 50% increase over the year. Much of this is due to the company’s investments in artificial intelligence. Microsoft owns 49% of OpenAI, a company that has been in the spotlight since the public launch of ChatGPT.
This investment allowed Microsoft to gain access to artificial intelligence technologies to create tools and include them in its products, such as Bing, Edge, and Windows. As the Verge notes, Microsoft’s stock jumped when the company announced Copilot pricing for Microsoft 365: $30 per user per month. The high value turned into an expectation of revenue growth.
On the other hand, Apple shares have been falling since December 2023. Investors fear weak iPhone 15 sales figures, particularly in China. In November, the company’s financial report brought sales of iPads and wearables lower than expected by market analysts, as well as a big drop in revenues brought by the Mac computer line.
To complete the picture, there is a chance that the company will lose the billion-dollar contract it has with Google — the search giant pays to be the default search engine on its devices. The deal is under investigation as part of the lawsuit against Google for an alleged monopoly.
Apple’s main launch in 2023 was the Vision Pro virtual reality headset. Even so, it should have little impact on the market, due to the high price ($3,500) and very limited availability, as it will initially only launch in the US.
This context led banks and brokerages to change their recommendations on Apple shares, which caused the share price to fall. In 2024 alone, that’s already $162 billion less in market value.
