Microsoft Market Capitalization Values Exceed Apple, Becomes The Most Valuable Company In The World

Microsoft ended trading sessions higher than Apple (photo: dock. pexels)

JAKARTA - Microsoft shares ended trading sessions higher than Apple for the first time since 2021 on Friday 12 January. This makes it the most valuable company in the world at a time of concern about product demand hitting the iPhone maker's shares.

Apple's Reuters Graphics chart rose 0.2% on Friday, while Microsoft added 1%. Thus, Microsoft's market cap reached US$2.887 trillion (Rp44.8 quadrillion), the all-time high, according to LSEG data. Apple's market capitalization is US$2.875 trillion (Rp44.8 quadrillion), calculated with data in the report on Thursday, January 11.

Concerns about smartphone demand have suppressed Apple's shares by 3% so far in 2024 after surging 48% last year. Microsoft rose about 3% throughout the year after surging 57% in 2023. This, driven in part by its superiority in generative artificial intelligence through investment in OpenAI, the creator of ChatGPT.

Apple's market capitalization reached USD 3.081 trillion (IDR 47.8 quadrillion) on December 14, according to LSEG.

Microsoft has combined OpenAI's technology into its productivity software package, a move that helps trigger cloud computing business recovery in the July-September quarter. Its artificial intelligence advantages also create opportunities to challenge Google's dominance in web searches.

Meanwhile, Apple is dealing with sluggish demand, including for the iPhone, its flagship product. Demand in China, the main market, has slumped as the country's economy is slowly recovering from the COVID-19 pandemic and Huawei is rising to erode Apple's market share.

Apple's mixed reality headset sales, Vision Pro, began on February 2 in the United States, marking the launch of Apple's largest product since the iPhone in 2007. However, the UBS in this week's report expects Vision Pro's sales to be "relatively insignificant" to Apple's profit per share in 2024.

Several times since 2018, Microsoft has briefly surpassed Apple as the most valuable company, the last time in 2021 when concerns about supply insecurity due to the COVID-19 pandemic hit the stock price of the iPhone maker.

These two technology stocks look relatively expensive in terms of their profit estimates, the general method of assessing companies listed on the exchange. Apple is trading with PE forwards by 28, well above its average over the last 10 years of 19, according to LSEG data. Microsoft is trading around 32 forward earnings, above the 10-year average of 24.

In its latest financial report in November, Apple projected sales for the holiday quarter that missed Wall Street expectations, affected by weak demand for iPad and wearable products.

Analysts on average expect Apple to record revenues up 0.7% to 117.9 billion US dollars (Rp1,832 trillion) for the December quarter, which will be its first annual revenue increase in four quarters. Apple will report the results on February 1.

Analysts expect Microsoft to report a 16% increase in revenue to USD 61.1 billion, driven by continued growth in its cloud computing business, when reporting results in the next few weeks.