Microsoft surpasses Apple to become the world's most valuable company

For the first time since 2021, Microsoft's market capitalization closed higher than Apple's, becoming the world's most valuable company.

At the close of trading on January 12, Apple shares rose 0.2%, while Microsoft shares rose 1%. Thanks to that, Microsoft's capitalization reached 2.887 billion USD, the highest to date. Apple's capitalization is currently 2.875 billion USD.

Concerns about smartphone demand have dragged Apple shares down 0.6% this year, after rising 48% last year. Microsoft shares, on the other hand, have risen 4%, after rising 57% last year. Investors are excited about the software giant, thanks to Microsoft’s investment in OpenAI, the parent company of ChatGPT.

Microsoft's capitalization surpassed Apple's in the session of January 12 (unit: trillion USD). Chart: Reuters — Microsoft's capitalization surpassed Apple's in the session of January 12 (unit: trillion USD). Chart: *Reuters*

Microsoft has integrated OpenAI's artificial intelligence technology into its software, a move that will help its cloud computing business recover strongly in the third quarter of 2023. Being at the forefront of AI also gives Microsoft more opportunities to challenge Google's dominance in search.

In contrast, Apple is facing weak demand, including for the iPhone - its golden goose. Demand in China is falling as the economy has not fully recovered from Covid-19. In addition, Apple is also facing increasing competition from Huawei there.

The Vision Pro glasses will go on sale in the US on February 2, marking Apple's biggest product launch since the iPhone was announced in 2007. However, a report from UBS earlier this week estimated that Vision Pro sales will have a "negligible" impact on Apple's EPS (earnings per share) this year.

Since 2018, Microsoft has briefly surpassed Apple to become the world's most valuable company several times, most recently in 2021, due to concerns about supply chain disruptions during the pandemic.

In its most recent financial report, released in November 2023, Apple forecast holiday sales that fell short of Wall Street expectations, citing weak demand for iPads and wearables.

Analysts say Apple's revenue for the final quarter of last year could rise 0.7% to $117.9 billion. This would be the first time in four quarters that the company has recorded revenue growth compared to last year. Apple will report its financial results on February 1.

Meanwhile, Microsoft's revenue is forecast to increase 16% to $61.1 billion, thanks to steady growth in its cloud computing business. The company's financial report will also be released in the coming weeks.

Ha Thu (according to Reuters)

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