Microsoft’s stock market value crossed the US$3 trillion (RM14.2 trillion) milestone for the first time on Wednesday (Jan 24), retaining its place as the world’s second most valuable company, just behind Apple.
Microsoft and Apple shares have been vying for the top spot as the most capitalised stock on Wall Street since the start of the year, with the iPhone maker briefly losing its crown to the software giant earlier in January.
Shares of Microsoft hit a record high of US$405.63, up 1.7%, enabling it to breach the US$3 trillion market capitalisation level. But it later closed at US$402.56, valuing Microsoft at US$2.99 trillion, just below the threshold price of US$403.65 that would have kept it above US$3 trillion.
Apple’s shares pared earlier gains and closed down 0.35% at US$194.50, giving it a market value of US$3 trillion, according to LSEG data.
Backed by its investment in ChatGPT maker OpenAI, Microsoft is widely seen as a frontrunner in the race for market dominance in the rollout of generative artificial intelligence (AI) among other tech heavyweights, including Google owner Alphabet, Amazon.com, Oracle, and Facebook owner Meta Platforms.
Using OpenAI’s technology, Microsoft has rolled out newer versions of its flagship productivity software products as well as its Bing search engine, which is expected to better compete with Google’s dominant search offering.
Apple, however, is facing slowing demand for its iPhones, particularly in China, where the company is offering customers rare discounts to boost sales amid stiff competition from home-grown rivals such as Huawei Technologies.
“I think it’s AI optimism for Microsoft,” said Stifel analyst Brad Reback, adding that Apple doesn’t seem to have the same “clear AI story” coupled with concerns about iPhone sales growth rates and penetration.
The 54 analysts covering Microsoft’s stock have a median price target of US$425, up from US$415 a month ago, and their average recommendation is “buy”, according to LSEG data.
Buoyed by AI optimism, Microsoft shares gained nearly 57% in 2023 and are up 7% this year. Apple’s stock rose by 48% last year and is up about 1% year-to-date.
Wall Street’s run-up to record highs will be put to the test in the coming weeks as megacap US technology-related companies begin reporting results. – Reuters
