Microsoft briefly reached a market valuation of over $3 trillion on Wednesday, securing its position as the world’s second most valuable company. The stock saw a 1.7% increase to $405.63, pushing its market capitalization just above $3 trillion during market hours. Despite closing up 0.9% at a record high, the final valuation settled at $2.99 trillion.
While briefly surpassing Apple Inc., which reached $3 trillion last year, Microsoft later dropped below Apple’s market valuation. Apple closed with a market valuation of $3.01 trillion. The ongoing competition between Microsoft and Apple for the top spot as the most capitalized stock on Wall Street has been unfolding since the beginning of the year.
Microsoft’s strategic investment in OpenAI, the creator of ChatGPT, positions it as a frontrunner in the race for market dominance in generative artificial intelligence (AI). This competition involves other tech giants such as Google’s Alphabet, Amazon, Oracle, and Meta Platforms, the parent company of Facebook.
Microsoft
Leveraging OpenAI’s technology, Microsoft has introduced new versions of its flagship productivity software and enhanced its Bing search engine, aiming to compete more effectively with Google’s dominant search offering.
In contrast, Apple is grappling with slowing demand for iPhones, especially in China. The company is offering rare discounts to boost sales amid intense competition from local rivals like Huawei Technologies. Stifel analyst Brad Reback attributes Microsoft’s success to “AI optimism,” noting concerns about Apple’s iPhone sales growth rates and market penetration.
Analysts covering Microsoft’s stock project a median price target of $425, up from $415 a month ago, with an average recommendation of “buy” according to LSEG data. Fueled by optimism in AI, Microsoft shares experienced a notable 57% gain in 2023 and have risen by 7% this year. In comparison, Apple’s stock increased by 48% last year and has seen a modest 1% rise year-to-date.
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