January 25, 2024 – Microsoft’s stock market value reached a historic milestone, surpassing $3 trillion for the first time. Despite briefly losing its top position to Apple earlier in January, Microsoft has solidified its place as the world’s second most valuable company.
Microsoft shares hit a record high of $405.63, marking a 1.7% increase and pushing its market capitalization over the $3 trillion threshold. However, it closed slightly below this level at $402.56, resulting in a market value of $2.99 trillion. Meanwhile, Apple’s shares closed down 0.35% at $194.50, maintaining its $3 trillion market value.
Microsoft, seen as a frontrunner in the race for market dominance in generative artificial intelligence (AI), has invested in OpenAI, the creator of ChatGPT. Leveraging OpenAI’s technology, Microsoft has introduced new versions of its flagship productivity software and enhanced its Bing search engine to better compete with Google.
Stifel analyst Brad Reback attributes Microsoft’s success to “AI optimism,” emphasizing the company’s clear AI strategy. In contrast, Apple faces challenges, including slowing demand for iPhones, particularly in China. Analysts note concerns about iPhone sales growth rates and penetration, making Microsoft’s AI-focused approach stand out.
The 54 analysts covering Microsoft’s stock have a median price target of $425, reflecting optimism in the company’s future performance. Microsoft’s shares gained nearly 57% in 2023 and have risen by 7% in the current year. Apple, with a 48% increase in its stock price last year, has seen a more modest 1% gain in 2024.
As Wall Street prepares for earnings reports from major tech companies, Microsoft’s success underscores the significance of AI initiatives in the industry.
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