- Judith Akatugba
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Microsoft maintained its position as the world’s second most valuable business, only behind Apple, after its stock market valuation crossed the $3 trillion milestone for the first time on Wednesday.
Since the beginning of the year, Apple and Microsoft shares have been competing to be the most capitalized stock on Wall Street. In January, the software giant momentarily surpassed the iPhone maker, but Apple eventually regained the title.
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With a 1.7% increase to $405.63, Microsoft’s share price broke beyond the $3 trillion mark, marking a new all-time high. However, by the time it ended at $402.56, Microsoft’s valuation had dropped to $2.99 trillion, just shy of the $403.65 mark that would have maintained it over $3 trillion.
Market valuation for Apple reached $3 trillion, as shares pared advances and finished down 0.35 percent at $194.50, as reported by LSEG.
Microsoft, with the support of its investment in OpenAI, the maker of ChatGPT, is generally considered as the market leader in the introduction of generative AI. Other tech giants in this race include Alphabet (the parent company of Google), Amazon.com, Oracle, Meta Platforms (the parent company of Facebook), and Microsoft itself.
Microsoft has updated its most popular productivity software and search engine, Bing, with the help of OpenAI’s technology. The goal is to make Bing more competitive with Google’s search offering.
However, domestic competitors like Huawei Technologies are making life difficult for Apple in China, where the tech giant is resorting to unprecedented price cuts to entice consumers.
According to Brad Reback, an analyst at Stifel, “I think it’s AI optimism for Microsoft.” He went on to say that Apple, on the other hand, doesn’t appear to have a “clear AI story” and is worried about the growth rates and penetration of iPhone sales.
Data from LSEG shows that out of 54 analysts who have covered Microsoft stock, the average rating is “buy,” and the median price objective has increased to $425 from $415 a month ago.
Accompanied by a positive outlook on AI, Microsoft’s stock rose 7% so far this year and approximately 57% in 2023. Apple’s stock is up only 1% so far this year, after rising 48% last year.
The next several weeks will be crucial for Wall Street as megacap U.S. technology companies start reporting their results, putting the recent record highs to the test.
