Microsoft Become The Most Valuable Public Company, Surpassing Apple, Thanks to Artificial Intelligence (AI)

Microsoft has surpassed Apple to become the most valuable public company, driven by its artificial intelligence assets.

Microsoft’s market value ended the week at $2.88 trillion, compared to Apple’s $2.86 trillion. Microsoft has seen a $1 trillion value increase in the last year due to the growing interest in generative AI, which is a major source of conflict in Hollywood’s dual strikes.

Shares in Microsoft completed Friday’s trading at $388.47, up 1% and close to an all-time high. Even though it ended the day slightly higher at $185.92, Apple’s stock has also been trading close to record territory.

Partially owned by Microsoft is OpenAI, the company that created ChatGPT. With a $10 billion investment made in it last year, the tech giant declared a sizable portion of the profits generated by its for-profit division. The market has been enthralled with AI stocks, leading to a threefold increase in shares of chipmaker Nvidia in 2023 as investors saw the company as a means of participating in the AI revolution.

Microsoft has invested in the AI industry through M12, its seven-year-old investment firm, in addition to its stake in ChatGPT. Partner Michael Stewart of M12 stated, “We were already looking for uses of generative AI before the whole thing exploded.”

Wall Street sees AI as a means for Microsoft to narrow the long-standing revenue difference in searches with Google. In 2023, the former earned roughly $3.2 billion in search revenue, while the latter brought in $43 billion.

In contrast to Microsoft, Apple’s presence in AI is not fully developed. Concerns regarding the company’s fourth-quarter results and possible softness in its flagship iPhone, which generates more than half of its revenue, have also caused its shares to decline by roughly 4% in recent weeks.

After briefly surpassing Apple during intraday trading on Thursday, Microsoft emerged as the most valuable publicly traded company at the end of the U.S. trading session on Friday.

For the week, shares of Microsoft rose by more than 3%, bringing the company’s market cap to $2.89 trillion. On the other hand, Apple’s stock fell by more than 3%, bringing its value down to $2.87 trillion.

Apple was downgraded to neutral from buy by Redburn Atlantic Equities analyst James Cordwell on Wednesday. He cited “little room for upside over the next few years” in iPhone growth as well as “an anticipated underwhelming March quarter.”

Al Gore, a former vice president of Apple, announced on Thursday that he will step down from the board next month. Gore has been a director of the company since 2003.

After showing off its artificial intelligence capabilities to developers at a San Francisco event, Microsoft, on the other hand, received a vote of confidence on Thursday. Three months in a row, Piper Sandler analysts reported to clients that they were “encouraged by the momentum around the most mature AI products” and that traffic to the GitHub website has increased year over year. On Microsoft shares, the analysts have given the stock a buy recommendation.

After brief stints as Microsoft and Saudi Aramco’s top two publicly traded companies, Apple has been the most valuable company for more than a year.