Microsoft hits US$3 trillion market value

NEW YORK – Microsoft’s stock market value crossed the US$3 trillion (S$4 trillion) milestone for the first time on Jan 24, as it retained its place as the world’s second most valuable company, just behind Apple.

Microsoft and Apple shares have been vying for the top spot as the most capitalised stock on Wall Street since the start of 2024, with

the iPhone maker briefly losing its crown to the software giant

earlier in January.

Shares of Microsoft hit a record high of US$405.63, up 1.7 per cent, enabling it to breach the US$3 trillion market capitalisation level.

Apple’s shares pared earlier gains and were trading at US$194.82, down 0.35 per cent, giving it a market value of US$3.01 trillion, according to London Stock Exchange Group data.

Backed by its investment in ChatGPT maker OpenAI,

Microsoft is widely seen as a front runner in the race for market dominance in the roll-out of generative artificial intelligence (AI) among other tech heavyweights, including Google owner Alphabet, Amazon.com, Oracle and Facebook owner Meta Platforms.

Using OpenAI’s technology, Microsoft has rolled out newer versions of its flagship productivity software products as well as its Bing search engine, which is expected to better compete with Google’s dominant search offering.

Apple, however, is facing slowing demand for its iPhones, particularly in China where the company is offering customers rare discounts to boost sales amid stiff competition from home-grown rivals such as Huawei Technologies.

“I think it’s AI optimism for Microsoft,” said Stifel analyst Brad Reback, adding that Apple does not seem to have the same “clear AI story”, coupled with concerns about iPhone sales growth rates and penetration.

The 54 analysts covering Microsoft’s stock have a median price target of US$425, up from US$415 a month ago, and their average recommendation is “buy”, according to LSEG data.

Buoyed by AI optimism, Microsoft shares gained nearly 57 per cent in 2023 and are up 7.3 per cent in 2024. Apple’s stock rose by 48 per cent in 2023 and is up 1.3 per cent year to date.

Wall Street’s run-up to record highs will be put to the test in the coming weeks as megacap US technology-related companies begin reporting results. REUTERS