With AI dominance, Microsoft to beat Apple in market value
Microsoft is on course to overtake Apple's stock market value and take a decisive lead in the next five years, thanks to its early adaptation of artificial intelligence (AI). Thirteen institutional investors believe that Microsoft's recent achievements in generative AI give it a strong edge over Apple, currently the world's most valued company. Microsoft's shares have risen 57% in 2023 and 7% in 2024, pushing its market capitalization above $3 trillion and making it the world's most valuable company.
AI investments boost Microsoft's prospects
Microsoft's early investments in OpenAI, the creator of ChatGPT, have allowed the company to integrate generative AI technology throughout its business. King Lip, chief strategist at Baker Avenue Wealth Management, said, "Microsoft has more levers to pull in the forms of Azure cloud, gaming, enterprise software, and of course, AI is the most compelling." Meanwhile, Apple heavily depends on the iPhone and has not yet revealed its plans for competing in the AI race.
Investors eye Apple's AI plans and China market
Investors are eager to learn about Apple's AI strategy when the company announces its December quarter results. They will also be keeping an eye on China, where iPhone has emerged as the best selling smartphone for first time but continues to face competition from local competitors and the resurgence of Huawei. So far in 2024, Apple's stock has remained flat, underperforming the S&P 500's nearly 2.5% increase and Microsoft's 7% surge.
NVIDIA emerges as potential contender for top spot in m-cap
NVIDIA, currently the most valuable chipmaker, could also contend for the title of the world's most valuable company in the coming years. Its shares have more than tripled in the last year. Wayne Kaufman, Chief Market Analyst at Phoenix Financial Services, said, "I have told our brokers and clients that NVIDIA is like Microsoft in the early 90s and Intel in the early 80s." NVIDIA's m-cap surpassed $1.5 trillion last week, making it Wall Street's fifth most valuable company.
