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Microsoft and Apple shares have been vying for the top spot as
the most capitalized 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 $405.63, up 1.7%,
enabling it to breach the $3 trillion market capitalization
level. But it later closed at $402.56, valuing Microsoft at
$2.99 trillion, just below the threshold price of $403.65 that
would have kept it above $3 trillion.
Apple's shares pared earlier gains and closed down 0.35% at
$194.50, giving it a market value of $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, on the other hand, 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 homegrown 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 $425, up from $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 U.S. technology-related companies
begin reporting results.
(Reporting by Chibuike Oguh in New York; Additional reporting by
by Noel Randewich in Oakland, California; Editing by Mark
Porter, Bill Berkrot, David Evans and Jonathan Oatis)
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