Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Apple Faces a Tough Year as Microsoft Becomes the Most Valuable Public Company

Published 15/01/2024, 20:02
Updated 07/04/2022, 09:55
After Friday's closing bell, Microsoft (NASDAQ:MSFT) overtook Apple (NASDAQ:AAPL) as the world's most valuable company.

Microsoft overtook Apple 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 (NYSE:XOM) 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.

***

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.