Microsoft dethrones Apple, becomes world's most valuable company

Posted:
in General Discussion edited October 2021
Microsoft on Friday overtook Apple as the world's most valuable company by market capitalization, with about a $100 billion gap between the two companies when markets closed.

Credit: AppleInsider
Credit: AppleInsider


Apple's market valuation, which is calculated by multiplying the share price by the number of outstanding shares, was $2.477.95 trillion as of 4 p.m. Eastern Time on Friday. Microsoft's capitalization was at $2.489.57 trillion.

The gap was bigger earlier on Friday, though Apple's stock price gained some ground after opening at a low around $147 per share.

Apple shares closed at $149.81, down 1.81% on the day.

Microsoft's share price, on the other hand, has surged since Tuesday. The company's stock price closed at $331.62 on Friday.

Apple's stock price when it reported September quarter revenues that missed Wall Street expectations on Thursday. Despite the worse-than-expected stock price, Apple's September quarter was still an all-time high and the company saw robust growth across most of its product categories.

According to Apple executives, the company lost about $6 billion in revenue because of ongoing supply constraints and chip shortages affecting industries across the globe.

Apple was the first U.S. company to reach market capitalizations of $1 trillion and $2 trillion. It became the world's most valuable company when it eclipsed Saudi Aramco in valuation in 2020.

Microsoft last overtook Apple in terms of market valuation in 2020 when the coronavirus pandemic wreaked havoc on supply chains and markets. Apple recovered, regained its top position, and went on to set new records across its product categories throughout the pandemic.

Although Apple was the first U.S. firm to reach a $2 trillion market capitalization, Microsoft crossed that threshold in June 2021. Since then, the company's share price has surged 34%.

Apple's share price has risen 20.5% since June 2021.

Microsoft and Apple have competed for the title of world's most valuable technology company in the past. Back in 2010, Apple dethroned Microsoft with a market capitalization of $222 billion. In 2018, Microsoft briefly regained that position.

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Comments

  • Reply 1 of 56
    I’m gonna cry.  B)
    repressthis
  • Reply 2 of 56
    BeatsBeats Posts: 2,694member
    Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
    williamlondonqwerty52killroythe1maximusjahbladerepressthisStrangeDaysFileMakerFellerjony0
  • Reply 3 of 56
    Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
    edited October 2021 pulseimageswilliamlondonpatchythepiratekillroythe1maximusjahbladerepressthisAlex_VStrangeDaysjony0
  • Reply 4 of 56
    sflocalsflocal Posts: 5,857member
    It's silly to think about 1st and 2nd place at these crazy-high valuations, but I still do wonder why Microsoft is valued that high.  Windows11 and Office365 is all I see them having.  I guess maybe them being more of a services company now carries more weight?

    Alex_V
  • Reply 5 of 56
    mpantonempantone Posts: 1,651member
    Beats said:
    Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
    Random? No.

    If you own shares of AAPL either directly or indirectly and you didn’t buy or sell today, you weren’t one of those who sent the share prices down.

    The people who sent the share price down were today’s buyers and sellers. Some sellers offered some of their shares and today’s buyers didn’t want to pay yesterday’s prices. Some of those sellers decided to accept lower bids. It’s called a free market economy.

    They aren’t random people. They are both institutional investors as well as retail investors. They all have tax IDs. The SEC knows exactly who these parties are and so will the IRS eventually. It’s not just Jimmy Fanboy Investor on AppleInsider, it’s more like some fund manager at FMR or someone who manages the pension fund of your state’s teachers union, hedge fund managers.

    While the stock market will punish companies (and not just Apple) for missing expectations, the market is mostly forward looking. The market is also unhappy when the company withholds forward guidance.

    Apple hasn’t offered guidance since the pandemic began and today’s market reaction was predictable.
    edited October 2021 dewmekillroyelijahgapplguybyronljahbladeFileMakerFellerAI_liascuriousrun8jony0
  • Reply 6 of 56
    dk49dk49 Posts: 186member
    Why?! what innovation did the come up with, Windows 11 which is a copy of the macOS UI?
    Microsoft is not just about Windows. They have are a major player in cloud services, behind only Amazon. And under satya nadella, Microsoft has transformed in a major way. From entering core hardware space with computer devices to hololens to headphones, buying and building some of the best dev tools, it has come a long way since the days of having Windows as it's main revenue generator. It's trying to be more like Apple and Google for its consumer facing products, and you can always debate how Apple's products are better, but still all this push has impacted it positively.
    edited October 2021 elijahgbyronljahbladeuraharaDogpersoncaladanianurashidAI_lias
  • Reply 7 of 56
    crowleycrowley Posts: 9,342member
    Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
    Xbox Games Pass is innovative, as is what Microsoft are doing with Azure, AI and Cognitive Services, and their Power Platform business services.

    Windows is a pretty small part of what Microsoft make their money.
    dewmeuraharabeowulfschmidtjony0
  • Reply 8 of 56
    harrykatsarosharrykatsaros Posts: 48unconfirmed, member
    Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
    patchythepirateAlex_V
  • Reply 9 of 56
    mpantonempantone Posts: 1,651member
    Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
    Investors are weenies.

     :p 
    edited October 2021 Alex_V
  • Reply 10 of 56
    mpantonempantone Posts: 1,651member
    Both Dk49 and Crowley are right. But you don’t have to blindly take their word for it.

    Sflocal and bloggerblog need to read Microsoft’s SEC filings. Those documents cover how the company makes money.

    This isn’t specific to Microsoft. This applies to all publicly traded American companies whether you sell bolts, sugar water, elevators or provide services like banking, dining, healthcare, or casino operation.

    Certain SEC filings are required BY LAW.

    Anyone who thinks Microsoft makes most of its money from Windows and Office hasn’t been paying attention for at least five years. Company business focuses can change. IBM doesn’t sell scales or PCs anymore.

    Oh and the vast majority of Alphabet’s revenue comes from ad sales. Always been that way since they went public.
    edited October 2021 dewmecuriousrun8
  • Reply 11 of 56
    crowleycrowley Posts: 9,342member
    Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
    Confidence.  Investors have more confidence in Microsoft maintaining its income, which is very embedded in the business markets, than they do in Apple maintaining its income in comparatively fickle consumer markets.

    Also, Apple is more vulnerable to volatility in the supply chain.
    edited October 2021 dewme
  • Reply 12 of 56
    tjwolftjwolf Posts: 407member
    mpantone said:
    Beats said:
    Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
    Random? No.

    ...
    They aren’t random people. They are both institutional investors as well as retail investors. They all have tax IDs. The SEC knows exactly who these parties are and so will the IRS eventually. It’s not just Jimmy Fanboy Investor on AppleInsider, it’s more like some fund manager at FMR or someone who manages the pension fund of your state’s teachers union, hedge fund managers.

    While the stock market will punish companies (and not just Apple) for missing expectations, the market is mostly forward looking. The market is also unhappy when the company withholds forward guidance.

    Apple hasn’t offered guidance since the pandemic began and today’s market reaction was predictable.
    I think wha the OP meant by "random people" is analysts who set targets for AAPL that oftentimes have little basis in reality.  Oftentimes they're even outside the range Apple  provides!  You're right, during the pandemic Apple stopped giving guidance - because covid impacts made it too difficult to be accurate.  But before the pandemic, Apple has been one of the most transparent companies out there - they always gave pretty accurate range for where they expected future revenue to fall.  That didn't prevent "random people" from setting targets outside that range and, if Apple - as it said it would - hit their projected range, AAPL would still be punished, because it didn't meet the fantasy numbers these 'analysts' said AAPL should hit.

    The randomness of theses analysts' projections has only been exacerbated by the pandemic.  In this quarter, AAPL was punished because they didn't meet an average made up of fairly arbitrary projections.  It did meet analysts' equally arbitrary EPS prognostication.

    Apple had a stellar quarter - every sales category is up; every region they're selling into is  up; their channel inventory is at record lows; the quarter itself was another record quarter for AAPL.  There was absolutely *nothing* wrong with this quarter.  AAPL didn't even guide negatively (as AMZN has done) for the next quarter.  That, I think, is why the 4% drop after earnings became a 1.9% drop during the trading day.  I expect on Monday it'll keep trending upward - that's why I bought at 147.

    qwerty52retrogustoJanNLMacProbyronlFileMakerFellerjony0
  • Reply 13 of 56
    Not as magical now it seems...
  • Reply 14 of 56
    mpantonempantone Posts: 1,651member
    Look, the big volume is controlled by fund managers and institutional investors. Today’s share volume was 116M, +56% higher than the 3-month average of 76M. This wasn’t a handful of Redditors or random schmucks.

    AAPL is not a meme stock like GME.

    Even the ANALysts aren't “random people.” The same people have been doing this for years sometimes decades.

    Apple's senior management and investor relations teams probably have a pretty good idea how each analyst will forecast anyhow.

    Let's remember that when Apple IPO-ed in December 1980 they accepted the fact that the company valuation would be set by investors. If they didn't want that, they should have stayed private or take themselves private at a later date. They are still a publicly traded company and are subject to market actions like what happened today regardless of whether they think it is "petty" or not.

    It's not like Apple can turn on all deflector shields and keep the share price from dropping.
    edited October 2021 curiousrun8
  • Reply 15 of 56
    tjwolftjwolf Posts: 407member
    To overtake AAPL,, MSFT's P/E ratio had to go to 37.  AAPL's is at 29.3.  Big difference.  Why does MSFT deserve a higher P/E?  Apple's services business is growing just as fast as MSFT's.  It's established products (iPhone, Mac) are growing just as quickly, if not more so, than MSFT's cloud and subscription services.  On top of that, Apple has new hardware categories (e.g. AirPods, Watch) that are growing gangbusters and for which MSFT has no equivalent.

    MSFT has done a great job getting into the cloud business and moving their core software assets into a subscription-base.  In my view it just doesn't deserve a 10 point higher P/E as it's not growing its revenues much (any?) faster than AAPL.
    patchythepirateJanNLMacProAlex_VFileMakerFeller
  • Reply 16 of 56
    mpantone said:
    Beats said:
    Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
    Random? No.

    If you own shares of AAPL either directly or indirectly and you didn’t buy or sell today, you weren’t one of those who sent the share prices down.

    The people who sent the share price down were today’s buyers and sellers. Some sellers offered some of their shares and today’s buyers didn’t want to pay yesterday’s prices. Some of those sellers decided to accept lower bids. It’s called a free market economy.

    They aren’t random people. They are both institutional investors as well as retail investors. They all have tax IDs. The SEC knows exactly who these parties are and so will the IRS eventually. It’s not just Jimmy Fanboy Investor on AppleInsider, it’s more like some fund manager at FMR or someone who manages the pension fund of your state’s teachers union, hedge fund managers.

    While the stock market will punish companies (and not just Apple) for missing expectations, the market is mostly forward looking. The market is also unhappy when the company withholds forward guidance.

    Apple hasn’t offered guidance since the pandemic began and today’s market reaction was predictable.

    Not agree, because all the people you’re talking about, are following the advices of really random  people: so called “analysts”, the “best” of which are working for Wall Street. 

    By predicting unrealistic high expectations, they are creating negativity around Apple, even when Apple breaks its own quarterly revenue records 


    retrogustoJanNLMacPro
  • Reply 17 of 56
    Lol. This is so absurd, even accounting for Microsoft’s cloud business. Apple always seems to get a pessimistic view from ‘investors.’ I’ve always assumed this is because AAPL is so strong, suppressing its true value makes it an easy call for institutions, who can easily pump it back up when they need to. But at this point it seems like Apple is being punished for not being a part of the institutional elite (a dynamic that seems to be increasingly influencing a lot of society), by continuing to promote privacy and security, among other things. 
  • Reply 18 of 56
    This is a temporary hiccup due COVID related supply constraints. Apple is expanding and diversifying, Microsoft is maintaining. 
    iOS_Guy80
  • Reply 19 of 56
    Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
    Most tech valuations are based not so much on current income of companies, but expectations of growth in future income. 
    AI_lias
  • Reply 20 of 56
    Microsoft raised Office suite price recently. Market is happy Microsoft will make more money. 
    randominternetpersonFileMakerFellerAI_lias
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