Microsoft Corp. is getting closer to retaking the title of
most valuable U.S. company as it narrows in on Apple Inc.
Now valued at $2.73 trillion, Microsoft (MSFT) is worth
about $100 billion less than Apple (AAPL), which is valued at $2.83 trillion.
Apple hasn't been worth less than Microsoft since a 14-session stretch that
ended Nov. 17, 2021, and the market-cap gap hasn't been this small since Nov.
22, 2021.
Microsoft's stock is coming off a slightly stronger year
than Apple's, having risen 57% in 2023 as compared with 48% for Apple.
Microsoft shares have also seen slimmer losses to start 2024.
The rally in Microsoft shares comes as enterprise spending
has held up, aiding the company's Azure cloud-computing business. Azure has
also benefited from the artificial-intelligence frenzy, with analysts noting
that AI seems to be helping the company outperform rival Alphabet Inc. (GOOG)
(GOOGL) in the cloud.
Microsoft’s business is levered to AI in other ways, and a
key test in the year ahead is whether customers will pay up for AI enhancements
to the company’s productivity and other software offerings.
Apple, meanwhile, has seen its business stagnate in recent
quarters as the company deals with heightened competition in China and general
macroeconomic pressure that is weighing on consumer spending. The company has
posted four consecutive quarters of year-over-year revenue declines, and two
analysts have downgraded the stock so far in 2024, warning of the potential for
continued pressure in the smartphone market.