Microsoft (NASDAQ:MSFT) has outpaced Apple to secure the position of the world’s largest company by market capitalization. This achievement is attributed to Microsoft’s strategic emphasis on generative artificial intelligence (AI), a sector that has gained increasing favor among investors.
According to data from LSEG, Microsoft’s market cap reached a record high of $2.887 trillion, surpassing Apple’s market cap of $2.875 trillion as of the close on Friday. Apple had reached its peak market cap of $3.081 trillion on December 14.
Microsoft displayed remarkable growth, along with tech giants Nvidia and Amazon, by placing a significant focus on AI. Over the past year, Microsoft’s market value has surged by over $1 trillion, marking a substantial increase.
Analysts are drawing parallels between this market shift and the early 2000s, a period when technology and internet companies started to replace consumer and financial firms at the forefront of the market.
Microsoft’s adoption of OpenAI’s technology across its suite of productivity software played a pivotal role in revitalizing its cloud-computing business in the July-September quarter. This move has also positioned Microsoft to challenge Google’s dominance in web search.
Meanwhile, Apple faces challenges with diminishing demand, particularly for its flagship product, the iPhone. The company’s struggles are pronounced in China, a critical market where economic recovery from the COVID-19 pandemic has been slow, and competition from a resurgent Huawei is intensifying, impacting Apple’s market share.
In contrast, other AI-focused tech players, including Nvidia, Meta Platforms, and Alphabet, have also witnessed substantial increases in their market caps over the past year.
The tech landscape is witnessing a transformative shift, reminiscent of the early 2000s, as Microsoft’s deep dive into AI propels it to the forefront of global market capitalization, overtaking long-standing competitor Apple.
Featured Image: Pixabay
Author Stephanie Bédard-Châteauneuf 
