Microsoft briefly edged out Apple as the most valuable company in the US
In intraday trading on Thursday, Apple was usurped as the most valuable company in the US for about two hours, with Microsoft temporarily taking the crown more than two years after the last time it happened.
Credit: Microsoft
The cross-over happened at about 9:50 AM ET, shortly after the market opened, and reversed itself around 11:10 AM ET. Apple has been hit by a few downgrades to its stock in the last few days, and Microsoft has seen the opposite.
Trading has been slightly above-average overall on Thursday, with the NASDQ down by about a half-percent. Apple's stock has been hit by about $3 a share for losses today. Microsoft stock is down now, after briefly being up from Wednesday's close.
In August 2020, Apple became the first publicly-traded US company to reach a $2 trillion market cap, and Microsoft became the second one in June 2021.
Later in October 2021, Microsoft took over the top spot, and for a few months was more valuable than Apple by $100 billion.
Microsoft's stock rose 57% in 2023, compared to Apple's which rose 48%. Microsoft shares have also seen slimmer losses at the start of 2024.
Apple, ohas seen its shares take a considerable drop in recent days. The first hit was taken following a claim by Barclays that iPhone demand is weakening and that the iPhone 16 range will not offer any compelling new features to tempt upgraders.
The analyst view that Apple is dependent on iPhone sales is part of why Microsoft is doing better. Analysts see Microsoft has being less attached to any hardware, and more attached to subscription software such as Office 365, and so therefore less attached to any falling demand for phones or computers.
And, Microsoft has launched an AI tool in Copilot, while Apple has not unveiled any similar ChatGPT-style app or service. Analysts appear to be ignoring that Apple has been using AI for many years, under the name Machine Learning, though, and also that it is never first to a market, even ones that it later comes to dominate.
Update January 11, 11:36: Updated with Apple going back into the lead.
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So, Mac and iPad sales are dropping big time, iPhone is static, R&D is going to an Apple Car that seems stuck, and then Microsoft understood AI, while we in 2023 had the same old Siri and the option to buy a new HomePod, which was exactly the same as... the old HomePod. Flatlining companies don't attract the best talents. We need for Apple to grow, add more users, and enter big markets (cars). Competing with Zuckerberg on doing the heaviest headset is taking away talent, and now MS is once again #1.
They're one of the most painful companies to open a support ticket with at the moment.
Microsoft made $211b in 2023 where $54b is personal computing, the rest is from cloud and business. Total revenue they attribute to cloud services is $111b. Net income $72b. Operating income $88b (of which personal computing is $16b).
Apple made $383b in 2023 on personal computing, most from iPhone sales ($200b), then $30b Mac, $30b iPad, $40b wearables and accessories, $85b services. Net income $97b. Operating income $114b (of which non-service income is $109b).
AI is mainly being deployed as a cloud service so it suits Microsoft's operations more closely, especially considering they own Github, Visual Studio Code and LinkedIn and provide compute services via Azure.
A headset is personal computing hardware so fits more closely with Apple's product line.
Microsoft is gaining stock value along with Nvidia due to the hype around the possibilities of AI. This will lead to growth in server hardware purchases (Nvidia) and cloud services (Azure). Apple doesn't operate enterprise AI cloud services that other businesses can leverage and they don't need to, they can do some things at the device level.
Apple's future growth will come from consumer services and probably some from AR hardware over the long-term.
Some of Apple's ex-employees wanted Apple to move into cloud computing but they didn't want to. They have said a few times they aren't trying to do everything, they want to stick with products and services where they can make a difference and excel at.
AAPL = $2.886T
MSFT = $2.859T
Tomorrow is another day for chart watching amongst the behemoths.
They do have a LLM team and from what I’ve heard, they have been making products, most of them are internally, like the program that retail uses to grade devices for trade ins. It’s not determined by humans anymore over the condition of the device. The salesperson uses their device to scan temporary pictures of the front and back and it comes back with a price. From what I saw when the iPhone 15 came out, it was pretty much on the money for analyzing the condition and determining the trade in value. When I asked the salesperson what happens if it’s wrong, she told me they just run it again and most of the time it resolves the misquote. It even gave value for a damaged device after another salesperson told his customer their damaged phone wasn’t worth anything.
I don't recall ever reading about MS getting such permission.