Thanks to AI, Microsoft surpasses Apple to become the world's most valuable company.

Microsoft has overtaken Apple to become the world's most valuable public company, after its market capitalization increased by more than $1 trillion over the past year.

According to Bloomberg , at the close of trading on January 11 (US time), Microsoft's stock price rose 1.5%, raising the company's market valuation to $2.9 trillion, higher than Apple's $2.87 trillion.

In just the last year, Microsoft's stock has increased in value by 57%. This growth is driven by investor expectations for the company's artificial intelligence segment, with the success of ChatGPT.

"Right now, it simply belongs to the AI generation," said Brad Reback, an analyst at investment bank Stifel. "Innovative AI will impact all of Microsoft's business, while Apple currently has little prospect for AI."

Microsoft surpasses Apple to become the world's most valuable company. (Image: Fifthperson)

This isn't the first time Microsoft has overtaken Apple in recent years. They did so in 2018, when their cloud computing business began to grow in 2021, while the COVID-19 pandemic impacted Apple's supply chain.

The first iPhone, launched in 2007, propelled Apple to the top of the market. From 2009 to 2015, the company's sales increased from 20 million iPhones per year to over 200 million.

As device sales slowed in recent years, Apple's CEO, Tim Cook, shifted the company's focus from selling more iPhones to selling users more apps and services on their existing iPhones. This strategy helped Apple's annual revenue skyrocket to $383 billion, nearly four times higher than at the end of 2011.

However, Cook's strategy has shown signs of fatigue as the iPhone has become more known for its incremental improvements each year than for its noteworthy innovations. At the same time, iPad and Mac purchases have declined, and revenue growth for services like Apple Music is slowing.

Last year, the company's revenue declined for four consecutive quarters, even though Apple's stock still rose by about 50%.

Wall Street analysts predict weak iPhone sales this year. The company is facing numerous challenges, including declining consumer demand, the ban on the Apple Watch in the US, and investigations related to its agreement to make Google the default search engine on the iOS platform.

Furthermore, China – the company's third-largest market after North America and Europe – is also witnessing a significant decline in demand for Apple products, facing fierce competition from Huawei, China's largest telecommunications technology group, as well as the slow recovery of the country's economy over the past year.

Hoa Vu (Source: NYTIMES)

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