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Microsoft CEO Satya Nadella. Justin Sullivan/Getty Images
Microsoft has overtaken Apple to become the world’s most valuable publicly traded company for the first time in more than two years, as concerns over smartphone demand weighed on the iPhone maker’s stock price in recent weeks.
The Redmond, Wash.-based software giant rose 1% to $388.47 on Friday, ending the day with a market valuation of $2.89 trillion. Meanwhile, Apple rose 0.2% to close with a market capitalization of $2.87 trillion. This is the first time since November 2021 that Microsoft has closed above Apple.
“When you compare and contrast the two, the growth that Apple is showing is nothing special, but Microsoft has done a better job of executing and demonstrating revenue growth,” said Matrix, who leads both companies. said David Katz, chief investment officer at Asset Advisors. . “Microsoft also has a clearer roadmap for AI and has done a great job articulating how it will accelerate growth and make the long-term outlook even more compelling.”
Both were participating in the strong ascent of the so-called Magnificent 7 in 2023, but their fortunes diverged this year. Microsoft rose 3.3% on continued optimism about artificial intelligence, while Apple fell 3.4% on growing concerns about growth. The company has been affected by rating downgrades by at least three analysts, according to data compiled by Bloomberg.
Wall Street’s less favorable view of Apple suggests it wouldn’t be surprising if Microsoft maintains or even capitalizes on its newfound scale advantage. Analysts’ average price target for Microsoft equates to an upside of about 8% over the next 12 months, slightly above Apple’s potential earnings. Such gains would push Microsoft past $3 trillion in market valuation, joining Apple as one of only two companies to reach such a threshold.
Microsoft and Apple remain by far the most heavily weighted companies in the S&P 500, together accounting for about 14% of the index. Few other companies can match this size. Oil giant Saudi Aramco’s corporate value is just over $2 trillion, while Alphabet, Amazon.com, and Nvidia are all worth more than $1 trillion. The next closest is Meta Platforms, which soared nearly 200% last year and sits just below the $1 trillion threshold.
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