Apple Faces a Tough Year as Microsoft Becomes the Most Valuable Public Company
After Friday's closing bell, Microsoft overtook Apple as the world's most valuable company.
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Microsoft (NASDAQ: MSFT) overtook Apple (NASDAQ: AAPL) as the most valuable public company in the world following the closing bell on Friday. This milestone is likely attributed to two key factors: Microsoft’s bigger role in the ongoing AI boom and Apple’s recent challenges.
Microsoft Dethrones Apple as the Most Valuable Company
On Friday, Microsoft’s stock closed with a higher market valuation than Apple’s for the first time since 2021, making the Windows maker the world’s most valuable company.
The move comes after Microsoft’s shares rose 1% higher on Friday, propelling its market cap to a record $2.88 trillion. Apple’s stock climbed just 0.18% that day, closing at a $2.87 trillion valuation.
Microsoft has temporarily dethroned Apple as the most valuable global company a couple of times over the past five years. Most recently, it happened in 2021, when concerns over supply chain constraints due to the Covid-19 pandemic weighed on Apple’s stock price.
Outside those, Apple has been the largest company by market cap for more than a decade. The iPhone maker unseated Exxon Mobil in 2021 and has held the title of the most valuable public company in the world almost without interruption since then.
Apple’s Challenges and Potential Opportunities in 2024
Apple’s loss of the top spot comes as the tech behemoth grapples with a myriad of challenges, most notably the cooling iPhone demand.
After experiencing revenue declines in all four quarters of the last calendar year, the demand for Apple’s flagship smartphone continues to exhibit concerning trends. Consequently, analysts from three prominent firms downgraded the stock since the start of 2024.
This led to a notable pressure on the company’s stock price, rising just 0.15% year-to-date. For comparison, the broader S&P 500 index gained 0.86% during that period.
Among the primary catalysts weighing on Apple is waning demand in China, one of three of Apple’s major markets, due to sluggish economic recovery and intensifying competition. The tech giant is also facing regulatory challenges there, with authorities recently extending the ban on iPhone devices for state employees.
Meanwhile, Apple remains poised for new opportunities this year, including the launches of new products such as the pricey Vision Pro virtual reality headset and a new iPad. Moreover, the company is also expected to integrate generative AI into its devices, a technology that witnessed an unparalleled boom in 2023.
The consensus 12-month price target for Apple’s shares currently sits at $199.13, implying a possible upside of 7.1% from the Friday closing price.
Do you think Apple’s loss of a top spot is just a temporary blow for the iPhone maker? Do you expect the iPhone maker to reclaim it in the coming months? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
