In a significant technological industry shift, Microsoft (NASDAQ: MSFT) briefly surpassed Apple (NASDAQ: AAPL) on Thursday to become the world’s most valuable company. Microsoft’s market capitalization was $2.888 trillion, compared to $2.887 trillion for the Cupertino, California-based tech giant.
The change occurred as Microsoft’s stock price rose 1.6%, while Apple’s stock price fell 0.9%.
Several factors, including the company’s strong growth in cloud computing and its recent investments in artificial intelligence, drove the gains for Microsoft.
Microsoft’s cloud computing business, Azure, has increased in recent years. In the fourth quarter of 2023, Azure revenue grew 46% year-over-year to $6.5 billion.
Cloud-based services are driving this growth, with businesses of all sizes showing increasing demand.
Microsoft is also investing heavily in artificial intelligence. In January 2024, the company announced it would acquire Nuance Communications, a leading artificial intelligence and speech recognition technology provider.
The acquisition is expected to accelerate Microsoft’s growth in the artificial intelligence market.
On the other hand, Apple has faced some challenges in recent months. In December 2023, the company’s iPhone sales in China fell for the first time.
Several factors, including the ongoing trade war between the United States and China and increasing competition from Chinese smartphone manufacturers, attribute to the decline.
In addition, Apple is facing an antitrust investigation by the U.S. Department of Justice.
The investigation is focusing on whether Apple is stifling competition in the mobile device market using its market power.
It is still being determined how long Microsoft’s position as the world’s most valuable company will be maintained.
Here are some of the critical factors that contributed to Microsoft’s rise to the top:
Strong growth in cloud computing:
Azure is Microsoft’s cloud computing platform, which has been increasing in recent years. In the fourth quarter of 2023, Azure revenue grew 46% year-over-year to $6.5 billion. This growth is driven by increasing demand for cloud-based services from businesses of all sizes.
Investments in artificial intelligence:
Microsoft is investing heavily in artificial intelligence and has made several acquisitions in this area. In January 2024, the company announced it would acquire Nuance Communications, a leading artificial intelligence and speech recognition technology provider.
Strong balance sheet:
Microsoft has a strong balance sheet with a cash position of over $100 billion. This gives the company the financial flexibility to make strategic investments and acquisitions.
Whether Microsoft can maintain its position as the world’s most valuable company remains to be seen. However, the company’s strong growth in cloud computing and artificial intelligence gives it a good chance of staying at the top for the foreseeable future.