Microsoft and Apple shares have been vying for Wall Street’s most valuable stock since the start of the year. The iPhone maker briefly lost its crown to software giant Microsoft in early January.
Microsoft’s shares rose 1.5 percent to $ 404.72, breaking a record and allowing the tech giant to briefly surpass its market capitalization of $ 3 trillion. According to LSEG data, Apple’s shares rose 0.14 percent to $ 195.47, reaching a market value of $ 3.02 trillion.
Wall Street’s record highs will be tested in the coming weeks as US tech-related mega-corporations start to release their results.
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China and Huawei drag Apple down
Apple, meanwhile, is grappling with weakening demand, including for the iPhone, its biggest revenue driver. Demand in China, a key market, has fallen as the country’s economy has been slow to recover from the pandemic and a resurgent Huawei has reduced its market share.
“China could be a drag on Apple’s stock market performance in the coming years,” brokerage Redburn Atlantic said in a client note on Wednesday, downgrading Apple’s shares to “neutral”. At least three of the 41 analysts who follow Apple have lowered their ratings since early 2024.
Both stocks are trading at high valuations in terms of Price/Earnings (P/E) ratio, which is a common method in the valuation of publicly traded companies.
Microsoft grew faster than Apple in 2023
Apple’s shares, whose market value reached $3.081 trillion on December 14, closed last year with a 48 percent gain. This rate was lower than Microsoft’s 57 percent rise.
Microsoft has briefly surpassed Apple as the most valuable company several times since 2018, including in 2021, when concerns about supply chain shortages from Covid hit the iPhone maker’s stock price.
At the moment, Wall Street is more favorable to Microsoft. The company has no “sell” rating and nearly 90 percent of brokerages covering the company recommend buying the stock. Apple has two “sell” ratings and only two-thirds of analysts who follow the company say “buy.”