Microsoft Surpass Apple as World's Most Valuable Company

The slump in Apple Inc. shares on Friday propelled Microsoft Corp. to the position of the world's largest listed company by market capitalization. Apple fell 1.8% after reporting fourth-quarter revenue that was below the average analyst estimate, giving the iPhone maker a market value of $ 2.46 trillion. Microsoft rose 2.2% to reach a market value of $ 2.49 trillion, outperforming Apple after reporting results above estimates for the 11th consecutive quarter earlier this week.

"If you're looking for safety in tech, Microsoft probably seems like a safer bet to me than Apple," Michael Matousek, head trader at U.S. Global Investors, said in a phone interview. "If there was a downturn in the economy, I would expect Microsoft to stand up better because its products are diversified across more businesses."

The last time Microsoft dethroned Apple was in the first half of 2020 when investors flocked to growth stocks amid the Covid-19 pandemic. Microsoft posted its best weekly profit since November.

In June, Microsoft took its place in the history books as the second American public company to reach a market value of $ 2 trillion, fueled by bets that its dominance in cloud computing and enterprise software will expand. even more so in a post-coronavirus world. Its shares have outpaced Apple and Amazon.com Inc. this year in expectations of long-term growth in both earnings and revenue, and expansion in areas such as machine learning and cloud computing. Microsoft is up more than 49%, while Apple is 13% higher and Amazon is up more than 3%.

Its stocks aren't cheap, trading at a 20% premium to the high-tech Nasdaq 100 index. But soaring valuations haven't stopped investors from increasing their holdings in tech stocks this year. The Nasdaq 100 Index is on par with the S&P 500 Index with a rally of more than 22% each and the Nasdaq Composite is up approximately 20%.

"Size begets size and strength begets strength. This is the sort of thing that is nice to see; Microsoft was a rock star in the '90s -- one of the four horsemen -- and it has clearly gotten its mojo back," Matousek said.