For the first time in more than two years, Apple doesn't rule the stock valuation roost. CNBC reports that the tech giant was toppled on Friday by Microsoft as the most valuable public company. Microsoft ended the workweek with a market valuation of $2.89 trillion, compared to Apple's $2.87 trillion. Microsoft shares increased more than 3% for the week, while Apple's fell more than 3%. Bloomberg notes it's the first time since November 2021 that Microsoft has held a higher value than Apple.
"When you compare and contrast the two, the growth Apple is showing is nothing special, whereas Microsoft has done a better job of executing and demonstrating earnings growth," investment expert David Katz of Matrix Asset Advisors, which has positions in both companies, tells Bloomberg. The outlet found that Apple has also been slammed with three analyst ratings downgrades, while artificial intelligence has proven valuable to Microsoft.
"Microsoft ... has a much clearer roadmap with AI, and it has done a great job articulating how that will accelerate growth to make its long-term prospects even more compelling," Katz notes. The New York Times dives further into the artificial-intelligence angle, noting that "companies with the most momentum have put generative AI at the forefront of their future business plans." "It simply comes down to gen AI," a Stifel analyst tells the newspaper. "Apple doesn't have much of an AI story yet." (More Microsoft stories.)
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