After two years, Microsoft surpasses Apple as the most valuable company.

With market caps close at $2.887tn and $2.875tn, Microsoft leads due to iPhone sales concerns.

On Friday, Microsoft surpassed Apple in stock market value since 2021. Apple edged up 0.2%, while Microsoft gained 1%, resulting in Microsoft’s record-high market cap of $2.887tn, outpacing Apple’s $2.875tn. This shift was driven by concerns about iPhone demand affecting Apple’s shares.

Concerns over smartphone demand contributed to a 3% decline in Apple’s shares in 2024, contrasting with a 48% surge in the previous year. Microsoft, boosted by its investment in ChatGPT-maker OpenAI and a 57% rally in 2023, has seen a 3% increase year-to-date.

On December 14, Apple reached a market cap pinnacle of $3.081tn, as reported by LSEG.

Microsoft strategically integrated OpenAI’s technology into its productivity software suite, igniting a revival in its cloud-computing sector in the July-September quarter. This AI advantage positions Microsoft to challenge Google’s supremacy in web search.

Meanwhile, Apple faces subdued demand, notably for its iPhone, amidst challenges. In China, a significant market, demand has declined due to the slow economic recovery from the Covid-19 pandemic and resurgent competition from Huawei.

Apple is set to launch its Vision Pro mixed-reality headset on February 2 in the United States, representing its most significant product release since the 2007 iPhone. However, UBS estimates indicate that Vision Pro sales will have a “relatively immaterial” impact on Apple’s earnings per share in 2024.

Microsoft has briefly surpassed Apple in valuation a few times since 2018, including in 2021 when concerns about pandemic-related supply-chain shortages impacted Apple’s stock price.

In its latest quarterly report in November, Apple’s sales forecast for the holiday quarter fell short of Wall Street expectations, impacted by subdued demand for iPads and wearables.

According to LSEG, analysts anticipate Apple to post a 0.7% revenue increase to $117.9bn for the December quarter, marking its first year-on-year revenue growth in four quarters. Apple is scheduled to report its results on February 1.

Analysts expect Microsoft to report a 16% revenue rise to $61.1bn in the upcoming weeks, driven by continued growth in its cloud business.