The wind of fortune keeps turning the tide around in the US tech industry, favoring one company and displacing the other now and then.
On Friday, Microsoft’s market capitalization overtook Apple’s, with shares of the iPhone maker under pressure after financial results underwhelmed projections set by Wall Street analysts.
Sales of iPhones were up 47% year over year but also fell short of analyst expectations. CBNC noted that Apple’s fourth quarter only included a few days of iPhone 13 sales.
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Microsoft’s market capitalization reached $2.46 trillion, higher than Apple’s market cap of $2.43 trillion, making Microsoft the most valuable company.
That title exchanged hands as Microsoft stock rose 1% to $327.50 Friday, while Apple dropped as much as 4% to $146.41 after the company late Thursday posted its first miss in quarterly revenue since 2018. Fiscal fourth-quarter sales of $83.4 billion were below expectations of $85 billion, hurt by supply-chain disruptions for semiconductors.
“This speed bump will continue to weigh on revenue in the critical December quarter in the lead up to the festive season. However, what is clear is that Apple’s short-term issues are not driven by a lack of demand,” said Victoria Scholar, head of investment at Interactive Investor, in a note Friday.
Apple was the first company to reach a $1 trillion and $2 trillion market cap. The smartphone maker achieved the feat after beating oil company Saudi Aramco last year. However, covid-19-induced strains have impacted sales, jeopardizing some of Apple’s growth prospects.
Apple’s stock roughly 12% advance during 2021 “feels like a damp squib compared to last year’s 70% gain with some of the shine coming off the tech sector amid lofty valuations and as post-pandemic life resumes,” she said.
However, she noted Apple could still potentially become the first company to reach a $3 trillion valuation in the coming years. But the way it is going, Microsoft and Apple are likely going to play the Tom & Jerry chase for a long.
The last time Microsoft was more valuable than Apple was in May of 2020, amid the COVID-19 pandemic and stock market volatility. At the time, shares of the Redmond-based company suffered a slightly smaller decline than Apple did.
However, the gap between Apple, Microsoft and the rest are still wide, which means, no new company is expected to emerge as the most valuable company soon.