(Reuters) – Microsoft has become the world’s largest capitalization, overtaking Apple which has suffered, since the start of 2024, from investor concerns about the state of demand for its products.
Microsoft was up 1.5% on Thursday at 2:49 p.m. GMT and reached a capitalization of $2.888 billion, its lead in the generative artificial intelligence (AI) race supporting the stock.
Conversely, Apple lost 0.3%, for a capitalization of 2,887 billion dollars. This is the first time since 2021 that its valuation is lower than that of Microsoft.
Apple’s decline follows a series of recommendation cuts, which highlight the risks of weakening demand for iPhone, the group’s flagship product, particularly in China.
“China could be a drag on performance in the years to come,” wrote broker Redburn Atlantic in a note on Wednesday, referring to competition from Huawei and Sino-American tensions.
Redburn Atlantic adds that the smartphone maker’s services business could suffer from an investigation by US regulators into the lucrative deal sealed with Google, which makes it the default search engine on Apple phones.
Last year, Apple’s performance was 48% over the year, with the group reaching a capitalization record on December 14, at $3.081 billion.
This performance is lower than the 57% increase from Microsoft, which deployed many AI tools in 2023 thanks to its partnership with OpenAI, the maker of ChatGPT.
Microsoft’s capitalization has exceeded that of Apple several times since 2018.
No broker recommends selling Microsoft, with 90% of analysts covering the stock recommending to buy it.
Apple has two “sell” recommendations and only two-thirds of analysts who cover the company call it buy.
Apple’s forecast PE is 28 times, compared to a ten-year average of 19 times, while Microsoft’s is 31 times, compared to a ten-year average of 24 times.
(Reporting Aditya Soni in Bangalore, French version Corentin Chappron, edited by Sophie Louet)
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