As of the beginning of 2024, Apple’s stock is facing a
less-than-ideal situation, leading to a temporary loss of its market cap
throne. It’s not something extraordinary – Microsoft briefly outranked Apple in
2020 and 2021 – but the recent shift is still a significant event for the
financial markets. For more insights into noteworthy events in early 2024, the
SEC has finally approved
the first-ever spot Bitcoin ETFs. Woohoo! But let’s get
back to the topic at hand and explore the possibility of Microsoft securing the
top spot in 2024.
Microsoft stock has already grown by almost 5% over the
first two weeks of the year, while Apple is experiencing its worst
performance since the 80s, with four consecutive
sessions ending in the red.
The upward trajectory on the chart above allowed Microsoft
to become the world’s number-one company during an intraday session. Although
the lead was short-lived, this is big news anyway. Both companies boast market
capitalizations of close to 2.9 trillion US dollars, making it a neck-and-neck
race.
This shift became possible due to Microsoft’s exceptionally
strong performance in 2023. Artificial intelligence and associated hype
boosted big tech stocks, especially in the case of Microsoft, which is the
largest investor in OpenAI developing ChatGPT. Plus, Microsoft’s focus on other
AI
initiatives, such as Copilot AI and Azure, further contributed to its
success. Of course, Apple is also engaged in the AI race, but it seems the
company is lagging behind. As a result, Microsoft shares have risen by 62%
since the beginning, surpassing Apple’s 49% increase.
While AI technologies serve as a logical catalyst, the
chart indicates that the divergence between Apple and Microsoft’s movements
occurred in recent weeks. Two prominent factors are exerting pressure on
Apple’s shares. First, news of the Department of Justice nearing the conclusion
of an investigation against Apple, potentially leading to allegations of
anticompetitive practices. Additionally, some experts anticipate weaker sales
of Apple devices in regions like China. These factors have instilled doubts among
market participants regarding Apple’s
future prospects.
Predicting the outcome of the market cap competition by the
end of 2024 is challenging. Analysts’ targets provide some insight, with
expectations of a 6.5% increase in Apple stock and an 8.5% increase in
Microsoft stock over the next 12 months. The consensus forecasts suggest a
close race is likely to persist for some time. However, it’s crucial to
emphasize that conducting one’s research is essential for making informed
decisions about asset movements.