How Microsoft Gets Closer to Overtaking Apple as the Most Valuable U.S. Company

Apple has seen its value decrease from over $3 trillion to $2.89 trillion in early 2024. If this downward trend continues, Microsoft, the closest competitor, may soon overtake Apple as the most valuable company.

Microsoft is capitalizing on the generative AI revolution, integrating it into its products for both consumers and businesses, in response to a study they sponsored indicating that generative AI could contribute about $10 trillion to the global economy in the next decade.

The company has incorporated its AI feature, Copilot, into Microsoft 365 and Windows 11, offering enhanced security and privacy tailored for enterprise use. Indeed, Microsoft Copilot has proven quite useful. With new Windows PCs set to sport a dedicated "Copilot" key, users are poised to have unprecedented access to powerful generative AI capabilities. Additionally, Microsoft has a significant stake in OpenAI, owning 49% of the company behind ChatGPT, and has underscored its commitment with a multi-billion dollar investment in the AI pioneer as of January 2023.

Microsoft's cloud service, Azure, is performing impressively. Its expansion is drawing companies big and small, which are progressively depending on Azure's cloud framework and AI-driven offerings. This move to cloud computing, a sector where Microsoft excels, has the potential to erode Apple's dominance that is primarily based on hardware.

Apple's stock has taken a hit due to increased competition from Chinese companies, especially Huawei. According to Reuters, this has resulted in a significant 30% reduction in iPhone sales in China during the initial week of 2024.

In the early part of 2024, Microsoft's shares have shown more stability than Apple's amidst market fluctuations, bolstering investor faith in Microsoft's long-term potential.