As of the beginning of 2024, Apple's stock is facing a less-than-ideal situation, leading to a temporary loss of its market cap throne. It’s not something extraordinary – Microsoft briefly outranked Apple in 2020 and 2021 – but the recent shift is still a significant event for the financial markets. For more insights into noteworthy events in early 2024, the SEC has finally approved the first-ever spot Bitcoin ETFs. Woohoo! But let's get back to the topic at hand and explore the possibility of Microsoft securing the top spot in 2024.
Microsoft stock has already grown by almost 5% over the first two weeks of the year, while Apple is experiencing its worst performance since the 80s, with four consecutive sessions ending in the red.
The upward trajectory on the chart above allowed Microsoft to become the world’s number-one company during an intraday session. Although the lead was short-lived, this is big news anyway. Both companies boast market capitalizations of close to 2.9 trillion US dollars, making it a neck-and-neck race.
This shift became possible due to Microsoft's exceptionally strong performance in 2023. Artificial intelligence and associated hype boosted big tech stocks, especially in the case of Microsoft, which is the largest investor in OpenAI developing ChatGPT. Plus, Microsoft's focus on other AI initiatives, such as Copilot AI and Azure, further contributed to its success. Of course, Apple is also engaged in the AI race, but it seems the company is lagging behind. As a result, Microsoft shares have risen by 62% since the beginning, surpassing Apple's 49% increase.
While AI technologies serve as a logical catalyst, the chart indicates that the divergence between Apple and Microsoft's movements occurred in recent weeks. Two prominent factors are exerting pressure on Apple's shares. First, news of the Department of Justice nearing the conclusion of an investigation against Apple, potentially leading to allegations of anticompetitive practices. Additionally, some experts anticipate weaker sales of Apple devices in regions like China. These factors have instilled doubts among market participants regarding Apple's future prospects.
Predicting the outcome of the market cap competition by the end of 2024 is challenging. Analysts' targets provide some insight, with expectations of a 6.5% increase in Apple stock and an 8.5% increase in Microsoft stock over the next 12 months. The consensus forecasts suggest a close race is likely to persist for some time. However, it's crucial to emphasize that conducting one's research is essential for making informed decisions about asset movements.
