Microsoft briefly became the most valuable company in the world on Wednesday as its market cap touched $3 trillion, highlighting the increasing investor confidence in the software giant’s investments in artificial intelligence (AI). Although Microsoft’s market value exceeded $3 trillion in intraday trading, it slipped just under that milestone to finish the day slightly above $2.99 trillion. This temporary achievement placed Microsoft’s outstanding shares above those of Apple Inc., its main competitor in the tech industry. However, Apple swiftly reclaimed the top position by closing at a market cap of just over $3 trillion.
This recent development follows a similar occurrence two weeks ago when Microsoft momentarily surged past Apple before settling into second place. These two technology giants have been competing for the leading spot, which Apple secured on June 30 when it became the first publicly traded company to reach a $3 trillion market capitalization. Although Apple briefly held this distinction for two days two years ago, it never closed at that level.
Shares of Microsoft, headquartered in Redmond, Washington, rose nearly 1% to close at $402.56. During the last 12 months, the company’s stock has surged by approximately 68%. A contributing factor to Microsoft’s success is its investment in AI, alongside its core franchises of Office/M365 and Azure, a cloud computing platform. This multinational technology company has a partnership with OpenAI Inc., the developer of AI software called ChatGPT.
On the other hand, Apple witnessed a slight decrease of one third of a percentage point, closing at $194.50. Despite this small dip, Apple’s shares have gained about 43% over the past year. Both Microsoft and Apple have a significant number of retail investors, and Berkshire Hathaway, led by renowned investor Warren Buffett, holds a 5.8% stake in Apple, accounting for roughly 916 million shares valued at $178 billion.
Bank of America Global Securities expressed optimism about Microsoft’s investments in AI and issued a buy recommendation for the company in a research note released on January 18. While setting a price target of $450 for the Xbox manufacturer, the brokerage firm upgraded Apple from a neutral to a buy rating, with a price target of $225. It cited Apple’s multi-year iPhone upgrade cycle and the integration of generative AI features to be introduced in 2022 and 2025. Additionally, Apple is expected to launch its Vision Pro mixed-reality headset next month and AI-enabled iPhones in 2024 and the following year.
According to Wedbush Securities managing director and senior equity research analyst Dan Ives, Apple has the potential to achieve a $4 trillion market cap this year. However, it is important to note that these projections are subject to market fluctuations and various external factors.
In conclusion, Microsoft’s brief moment as the world’s most valuable company emphasizes the increasing investor optimism surrounding its investments in artificial intelligence. While Microsoft and Apple continue to vie for the top position, both technology giants are highly regarded by retail investors and have seen significant growth in their respective stock prices. As the competition between these companies continues, their strategies and investments in new technologies will play a crucial role in determining their future success.
