Silicon Valley tech giant Apple is in danger of being surpassed as the world's most valuable corporation by Microsoft (MSFT.O) after the recent drop in their shares.
Fresh concerns about smartphone demand have driven Apple's stock down 4% in 2024 after rising 48% the previous year. Microsoft is up around 2% year to date, following a 57% increase in 2023.
On Wednesday, Apple fell 0.4% as Microsoft gained 1.6%, significantly diminishing the iPhone maker's lead. Apple's stock market worth is now $2.866 trillion, whereas Microsoft's is $2.837 trillion.
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On December 14, Apple's market capitalization peaked at $3.081 trillion, while Microsoft's worth peaked at $2.844 trillion on November 28.
IPhone sales in China fell 30% in the first week of 2024, according to Jefferies analysts in a client note this week, adding to signals of increased competition from Huawei and other domestic rivals.
Apple's Vision Pro mixed-reality headset will be on sale in the United States on February 2, marking Apple's biggest product launch since the iPhone in 2007. However, according to a study released on Monday by UBS, Vision Pro sales will be "relatively immaterial" to Apple's earnings per share in 2024.
Microsoft has briefly surpassed Apple as the most valuable corporation many times since 2018, most notably in 2021, when concerns about supply chain problems connected to the COVID-19 pandemic weighed on the iPhone maker's stock price.
Both tech stocks are relatively costly regarding price to earnings, a typical technique of assessing publicly traded companies. According to LSEG statistics, Apple is trading at a forward PE of 28, significantly above its 10-year average of 19. Microsoft is trading at roughly 31 times anticipated profits, higher than its 10-year average of 24.
In its most recent quarterly report, issued in November, Apple provided a sales projection for the holiday quarter that fell short of Wall Street expectations owing to decreased demand for iPads and wearables.
According to LSEG, analysts expect Apple's revenue to increase 0.7% to $117.9 billion in the December quarter. This would be the company's first year-over-year revenue rise in four quarters. Apple will release its earnings in early February.
Analysts expect Microsoft to post a 16% increase in revenue to $61.1 billion in the coming weeks, driven by continued expansion in its cloud business.
