Microsoft Nears Overtaking Apple In Race for Most Valuable US Company Title

In an escalating race for the title of most valuable U.S. company, Microsoft Corp (NASDAQ:MSFT) is closing the gap with Apple Inc (NASDAQ:AAPL).

What Happened: As of Thursday, Microsoft’s current valuation stands at $2.73 trillion, approximately $100 billion less than Apple’s valuation of $2.83 trillion. The gap between the two tech giants is the narrowest it’s been since November 2021, according to a report by MarketWatch.

Microsoft’s stock performed slightly stronger than Apple’s in the past year, achieving a rise of 57% in 2023 versus Apple’s 48%. At the start of 2024, Microsoft shares suffered fewer losses compared to its counterpart.

The increased valuation of Microsoft can be credited to increased enterprise spending which has bolstered Azure, its cloud-computing business. The AI boom has also benefited Azure, helping Microsoft overtake Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) in the cloud sector.

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Conversely, Apple has experienced stagnation in recent quarters due to heightened competition in China and macroeconomic pressures affecting consumer spending. Repeated revenue declines over the last four quarters and two stock downgrades this year have added to Apple’s worries.

Why It Matters: The competition between Apple and Microsoft for the title of the world’s most valuable company by market cap is not a new one. Back in 2019, Apple managed to re-enter the $1-trillion club on the back of improved fundamentals and resolution of U.S.-China trade concerns.

However, Microsoft has been gaining ground, particularly with its growth in cloud computing and AI. In 2023, Microsoft’s market cap was closing in on Apple as investors were drawn in by its potential for growth and reduced China-related risks. This trend seems to have continued into 2024, with Microsoft poised to challenge Apple’s lead.

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