Business: Since the beginning of the year, Microsoft and Apple shares have engaged in a competitive battle for the title of the most capitalized stock on Wall Street. In a noteworthy development earlier in January, the software giant briefly claimed the top position, causing the iPhone maker to temporarily lose its coveted crown.
Microsoft achieved a significant milestone as its stock market value surpassed the $3 trillion mark for the first time on Wednesday. This achievement solidified its position as the world’s second most valuable company, closely trailing behind Apple.
Throughout the year, Microsoft and Apple shares have been in contention for the title of the most capitalized stock on Wall Street. Notably, in January, the software giant briefly claimed the top spot, causing Apple to momentarily lose its leading position.
During this period, Microsoft’s shares reached a record high of $405.63, representing a 1.7% increase and pushing its market capitalization past $3 trillion. However, by the market close, the shares settled at $402.56, valuing Microsoft just below the $3 trillion threshold at $2.99 trillion.
On the other hand, Apple experienced a slight decline in its shares, closing down 0.35% at $194.50, but maintaining its status as a $3 trillion company, according to LSEG data.
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.
Microsoft has harnessed OpenAI‘s technology to introduce updated versions of its flagship productivity software and Bing search engine. This move is anticipated to enhance its competitiveness against Google’s dominant search offering.
In contrast, Apple is contending with reduced demand for iPhones, particularly in China, where the company is resorting to rare discounts to stimulate sales amidst intense competition from local rivals like Huawei Technologies.
Stifel analyst Brad Reback suggested, “I think it’s AI optimism for Microsoft,” highlighting the company’s strong narrative in artificial intelligence. He noted that Apple lacks a similarly “clear AI story” and is dealing with concerns regarding iPhone sales growth rates and market penetration.
As per LSEG data, the 54 analysts covering Microsoft’s stock have set a median price target of $425, an increase from $415 a month ago. Their collective average recommendation is “buy.”
Fueled by optimism in the field of artificial intelligence (AI), Microsoft experienced an impressive surge with its shares gaining almost 57% in 2023 and posting a 7% increase in the current year. In comparison, Apple’s stock showed a rise of 48% throughout the previous year, with a more modest 1% increase year-to-date.
As the market eagerly awaits, the upcoming weeks will witness a significant test for Wall Street’s record highs, especially with the commencement of earnings reports from megacap U.S. technology-related companies.