Microsoft has overtaken Apple to become the largest company globally by market value, influenced by the surge in artificial intelligence. Microsoft’s share price increased by approximately 1% in early trading, pushing its market value to $2.87tn, nudging ahead of Apple whose shares declined nearly 1%.
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Throughout the trading day, the top spot kept changing hands between the two tech giants. The rallying of Microsoft’s shares has been propelled by investor enthusiasm regarding the new wave of generative AI. Microsoft is the largest supporter of OpenAI, the creator of the widely used AI-powered chatbot ChatGPT.
Despite the artificial intelligence (AI) boom propelling Microsoft forward, its competitor Apple has not experienced a similar surge. Microsoft, a pioneer in deploying AI chatbots and the largest supporter and cloud hosting provider for OpenAI, has consequently seen a rise in its share prices. Meanwhile, Apple’s stock has been impacted by concerns over weaker iPhone sales, particularly in China, leading to several downgrades by Wall Street analysts in early 2024.
The rivalry between the two tech behemoths dates back to the 1980s, with Apple accusing Microsoft of copying the “look and feel” of its software. Despite losing a lawsuit against Microsoft in the early 1990s and Microsoft’s domination of the PC market, Apple managed to surpass Microsoft in market value in 2010 due to iPhone’s success. Throughout the Covid-19 pandemic, the top spot fluctuated between the two as iPhone production disruptions affected Apple, and Microsoft capitalized on the remote work trend.
Apple is banking on its new Vision Pro headset to kickstart an era of “spatial computing,” which utilizes 3D graphics and new hand gestures for a more natural, intuitive interaction. Meanwhile, Microsoft continues to benefit from the success of AI chatbot ChatGPT, which is driving demand for its cloud services and Nvidia processors.
The AI trend has also impacted chipmaker Nvidia, elevating its stock by approximately 11% this year, potentially surpassing Amazon’s $1.6tn market capitalization. Both Apple and Microsoft are closely matched in their enterprise value, taking into account the companies’ cash reserves.
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