Since the beginning of the year, Microsoft and Apple shares have been competing to be the most capitalized stock on Wall Street; earlier in January, the software giant briefly overthrew the iPhone manufacturer.

Wednesday saw Microsoft’s stock market valuation surpass the $3 trillion barrier for the first time, keeping it close behind Apple as the most valuable business in the world.

Since the beginning of the year, Microsoft and Apple shares have been competing to be the most capitalized stock on Wall Street; earlier in January, the software giant briefly overthrew the iPhone manufacturer.

At $405.63, up 1.7%, Microsoft’s shares set a record and helped the company cross the $3 trillion market capitalization threshold. However, it ultimately closed at $402.56, meaning Microsoft’s valuation was $2.99 trillion, barely above the $3 trillion mark at $403.65.

According to LSEG data, Apple’s shares erased previous advances and finished down 0.35% at $194.50, giving it a $3 trillion market worth.

With support from its investment in ChatGPT creator OpenAI, Microsoft is regarded by many as the leader in the competition for market supremacy in the introduction of generative artificial intelligence (AI), outpacing other major players in the tech industry such as Alphabet, the parent company of Google, Amazon.com, Oracle, and Meta Platforms, the owner of Facebook.

Microsoft has released updated versions of its popular productivity software products and its Bing search engine, which is anticipated to more effectively rival Google’s market-dominating search service, using OpenAI’s technology.

In contrast, Apple is seeing a decline in the market for its iPhones, especially in China, where it is boosting sales by providing customers with infrequent discounts in the face of fierce competition from domestic rivals like Huawei Technologies.

Stifel analyst Brad Reback stated, “I think it’s AI optimism for Microsoft,” noting that Apple doesn’t appear to have the same “clear AI story” and raising doubts about iPhone sales’ penetration and growth rates.

Based on LSEG data, the 54 analysts that cover Microsoft’s stock have a median price target of $425, which is higher than their previous month’s price goal of $415. They also suggest “buy” on average.

Microsoft’s stock rose 7% this year and roughly 57% in 2023 thanks to excitement in AI. Apple’s stock returned 48% in the previous year and is up roughly 1% so far this year.

As megacap U.S. technology giants start to report results, Wall Street’s ascent to record highs will be tested in the upcoming weeks.

SOURCE: https://www.moneycontrol.com/news/world/microsoft-hits-3-trillion-market-value-second-to-apple-12120841.html#google_vignette