Microsoft hits $3 trillion market value, second to Apple
A Microsoft logo is seen in Los Angeles, California U.S. November 7, 2017. REUTERS/Lucy Nicholson
NEW YORK – Microsoft’s stock market value crossed the $3 trillion milestone for the first time on Wednesday, retaining its place as the world’s second most valuable company, just behind Apple.
Microsoft and Apple shares have been vying for the top spot as the most capitalized stock on Wall Street since the start of the year, with the iPhone maker briefly losing its crown to the software giant earlier in January.
Shares of Microsoft hit a record high of $405.63, up 1.7 percent enabling it to breach the $3 trillion market capitalization level. But it later closed at $402.56, valuing Microsoft at $2.99 trillion, just below the threshold price of $403.65 that would have kept it above $3 trillion.
Apple’s shares pared earlier gains and closed down 0.35 percent at $194.50, giving it a market value of $3 trillion, according to LSEG data.
READ: Microsoft topples Apple to become global market cap leader
Backed by its investment in ChatGPT maker OpenAI, Microsoft is widely seen as a frontrunner in the race for market dominance in the rollout of generative artificial intelligence (AI) among other tech heavyweights, including Google owner Alphabet, Amazon.com, Oracle, and Facebook owner Meta Platforms.
Using OpenAI’s technology, Microsoft has rolled out newer versions of its flagship productivity software products as well as its Bing search engine, which is expected to better compete with Google’s dominant search offering.
AI optimism
Apple, on the other hand, is facing slowing demand for its iPhones, particularly in China, where the company is offering customers rare discounts to boost sales amid stiff competition from homegrown rivals such as Huawei Technologies.
“I think it’s AI optimism for Microsoft,” said Stifel analyst Brad Reback, adding that Apple doesn’t seem to have the same “clear AI story” coupled with concerns about iPhone sales growth rates and penetration.
READ: Big Tech under pressure as Microsoft results put AI costs in spotlight
The 54 analysts covering Microsoft’s stock have a median price target of $425, up from $415 a month ago, and their average recommendation is “buy”, according to LSEG data.
Buoyed by AI optimism, Microsoft shares gained nearly 57 percent in 2023 and are up 7 percent this year. Apple’s stock rose by 48 percent last year and is up about 1percent year-to-date.
Wall Street’s run-up to record highs will be put to the test in the coming weeks as megacap U.S. technology-related companies begin reporting results.
