Microsoft’s recent achievement of surpassing a $3 trillion market value marks a notable milestone in its rivalry with Apple for dominance on Wall Street
The ongoing battle for Wall Street supremacy between Microsoft and Apple has been a highlight of the year 2024. In January, Microsoft briefly claimed the top spot, causing Apple to temporarily lose its position, according to Thompson Reuters. Very recently, Microsoft marked a significant milestone by surpassing a $3 trillion stock market value, making it the world’s second most valuable company, closely trailing Apple.
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Microsoft’s strategic investment in OpenAI positions it as a frontrunner in the competition for market supremacy in deploying generative artificial intelligence (AI), outpacing tech giants like Alphabet, Amazon, Oracle, and Meta Platforms. Capitalizing on OpenAI’s technology, Microsoft has updated key productivity software products and the Bing search engine to heighten competition with Google. Meanwhile, Apple addresses sluggish iPhone demand in China by offering rare discounts to stimulate sales, facing stiff competition from local rivals like Huawei.
Record-Breaking Moment for Microsoft
Microsoft reached a record high of $405.63 per share, experiencing a 1.7 percent increase that propelled its market capitalization above the monumental $3 trillion threshold. However, the euphoria was short-lived, with the stock settling at $402.56 by the close of the trading session. This brought Microsoft’s valuation to $2.99 trillion, just below the crucial $403.65 mark needed to sustain the $3 trillion level.
Despite Microsoft’s momentary surge, Apple maintained a slight lead in the race, boasting a market capitalization of $3.01 trillion. The iPhone maker had previously achieved this milestone in January 2022 when it crossed the $3 trillion threshold, solidifying its position as the world’s most valuable company.
Microsoft’s AI Boost Spurs Growth
Partly credited for Microsoft’s recent rise is its strategic investment in generative artificial intelligence (AI) via OpenAI, the entity behind ChatGPT. The integration of OpenAI’s technology into Microsoft’s productivity software suite has not only bolstered its stock value but also served as a key driver in revitalizing its cloud-computing division. Microsoft’s leadership in AI presents a distinct opportunity to challenge Google’s dominance in web search.
Conversely, Apple has encountered difficulties in meeting consumer demand, particularly for its flagship product, the iPhone, which constitutes a significant portion of its revenue. Worries surrounding smartphone demand, exacerbated by a sluggish economic rebound in China and heightened competition from Huawei, have led to a 3% dip in Apple’s shares in 2024. According to LSEG, Apple’s market capitalization reached its zenith at $3.081 trillion on December 14.
To regain traction, Apple is gearing up to unveil its Vision Pro mixed-reality headset on February 2 in the United States. Nonetheless, a recent UBS report suggests that the impact of Vision Pro sales on Apple’s earnings per share in 2024 is expected to be “relatively insignificant.” This prompts questions regarding the effectiveness of Apple’s latest product launch amidst the enduring challenges in the market.
Microsoft’s Evolutionary Journey
Microsoft, a prominent American multinational computer technology corporation, traces its origins back to April 4, 1975, when Harvard College dropout Bill Gates and his childhood friend Paul Allen founded it. Since then, the company has grown into the world’s largest software company and stands among the most valuable companies globally.
The inception of Microsoft in 1975 stemmed from a successful deal with Altair, prompting Bill Gates and Paul Allen to establish the company. Initial revenues amounted to $16,000 in that year. A significant milestone occurred in 1980 when Microsoft partnered with IBM, leading to a substantial market share by 1990, capturing around 90% of the global PC market.
The evolutionary journey continued with Project Longhorn in 2001, resulting in the releases of Windows Vista in 2007 and Windows 7 in 2009, cementing Microsoft’s dominance in the software market. Expansion into gaming and the mobile phone sector came with the introduction of Windows 8 in October 2012, where the Xbox series and Windows Mobile OS gained significant market shares.
A notable moment in Microsoft’s history was the 2011 acquisition of Skype for $8.5 billion, aimed at competing with Apple’s Facetime and Google’s Voice. This led to Skype’s integration into products like Outlook, Xbox, and Windows smartphones. In 2008, Microsoft ventured into cloud computing with the Windows Azure platform, enabling consumers to build computing infrastructure in the cloud. Office 365, a cloud version of the Office business software suite, was released in 2011, offering applications such as Word and Excel. Additionally, Microsoft’s SQL Server 2012 brought numerous enhancements, including Always On for improved database availability and compatibility with cloud setups. On January 23, 2023, Microsoft announced a new multi-year, multi-billion dollar investment deal with ChatGPT developer OpenAI.
Presently, Microsoft continues to diversify its product portfolio and holds a prominent position in the ever-evolving technology landscape. Innovations such as Windows 8.1, cloud computing platforms, and strategic acquisitions play pivotal roles in shaping its trajectory.
Conclusion
Microsoft’s recent surge past a $3 trillion market value signifies a significant milestone in its ongoing competition with Apple for Wall Street supremacy. Fueled by strategic investments in AI through OpenAI, Microsoft is poised for continued growth and innovation. Meanwhile, Apple grapples with market challenges, highlighting the dynamic nature of the tech industry’s top contenders in the global market.
