Microsoft market cap briefly displaces Apple as world’s most valuable company 

In a brief but significant development on Thursday, tech giant Microsoft claimed the title of the world's most valuable listed company, surpassing iPhone maker Apple and signaling the evolving dynamics in the technology sector, largely driven by the buzz over artificial intelligence (AI). 

During intraday trading, Microsoft's fully diluted market cap reached $2.875 trillion, surpassing Apple's valuation of $2.873 trillion. However, by the close of stock markets on Thursday, Apple had reclaimed the top spot with a market value of $2.89 trillion — slightly ahead of Microsoft's $2.86 trillion. 

Apple has consistently held the No. 1 spot for over 500 trading days, with the last time Microsoft surpassed Apple in market valuation occurring in November 2021, according to Dow Jones Market Data. Either Apple or Microsoft has held the largest market cap position since February 2019. 

On Thursday, Apple shares fell 0.3% to $185.59, while Microsoft rose 0.5% to $384.63. The performance of the two stocks, influenced by similar factors, has diverged greatly over the past three months, with Microsoft gaining 16% and Apple rising by only 2%. 

Microsoft AI investments: Relationship with OpenAI seen as catalyst for MSFT stock 

Microsoft's recent outperformance has been linked to excitement surrounding its perceived leadership in AI technology, particularly its close association with OpenAI, the developer of chatbot ChatGPT. Microsoft’s quarterly results in October suggested the growth of its cloud-computing business was accelerated by AI — likely linked to its relationship with OpenAI. Apple, however, has not shown the same progress, and analysts are concerned about its lack of a clear AI strategy. 

The upcoming U.S. release of Apple's Vision Pro mixed-reality headset on February 2 is seen as a potential catalyst for the stock, as it aims to establish a new major product category for the company. However, a high price point of $3,499 and uncertainty about public demand for mixed-reality technology have tempered short-term sales expectations. 

Apple share price forecast: Analysts see Microsoft overtaking Apple’s market cap 

Despite positive prospects for both companies, Wall Street seems to favor Microsoft solidifying its advantage over Apple. Analysts cited by Barron’s reporter Adam Clark projected an average target price of $420.91 for Microsoft, reflecting potential growth of 10% from Wednesday's closing level. In comparison, the Apple share price has a target of $197.58, implying a potential 6.1% upside. 

Two analysts, Harsh Kumar at Piper Sandler and Tim Long at UK investment bank Barclays, recently downgraded their Apple share price forecasts, citing concerns about the company’s valuation and pressures in the global smartphone market. Kumar revised AAPL stock down to Neutral from Overweight, while Long shifted to an Underweight rating from a prior rating of Neutral.  

Most analysts, however, remain optimistic about the Apple share price despite the ratings revisions and the shaky start to 2024.  

According to 33 analysts surveyed by TipRanks that offered 12-month Apple stock price targets, the consensus forecast for AAPL last stood at $203.35 — a potential 9.57% upside from its current price as of January 12, 2024.   

The highest listed Apple share price forecast on Tipranks was $250.00, while the lowest was listed at $150.00. Of the 33 analysts surveyed, 23 offered a Buy rating on APPL stock, while 9 had it as a Hold, and one gave it a Sell rating.   

At the time of writing on Friday, Apple shares were mostly flat in premarket trading at $184.03, after closing at $185.51 (down 0.32%) the previous day. Microsoft shares were up 0.07% at $384.91. MSFT stock has gained over 61% over the past year — in contrast, Apple’s shares have risen by a little over 39%.  

Both companies have outpaced the benchmark S&P 500 index, which gained 20% since January 2023 and last closed at 4,783.45. 

When considering shares for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.  

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.