Microsoft helped to lift the Nasdaq higher on the final trading day of the week, with a rise of 2.4% Friday morning outpacing Apple’s 0.8% gain which further narrowed the market capitalization gap between the two biggest “Big Tech” stocks. At this rate, Microsoft is closing in on Apple in the world’s most valuable company race.
Dan Caplinger for The Motley Fool:
Many investors might not recall that Microsoft has been atop the market capitalization list in the past. Back in 1998, the tech boom helped lift the Windows maker’s market cap to more than $260 billion, helping Microsoft surpass General Electric to take the top spot.
The ensuing tech bust and bear market starting in 2000 led to Microsoft losing its perch for a while. However, by mid-2002, Microsoft was back in the top spot, once again topping GE. It wasn’t until 2005 that rising energy prices helped ExxonMobil surpass tech companies, and the oil giant held its spot until Apple finally took over in the early 2010s.
The past few years have seen Microsoft and Apple change places several times… Right now, about $150 billion separates Apple from Microsoft. All it would take is a 6% to 7% relative move to send Microsoft into the top spot once again.
MacDailyNews Take: Microsoft’s last reign as the most valuable U.S. company by market capitalization was a short one (just two days) as Apple shares climbed on February 12, 2020 to retake the crown.
Current Market Caps:
1. Apple – $2.450 trillion
2. Microsoft – $2.287 trillion
YTD returns : MSFT +40%, AAPL +14.5% 😭
Microsoft is smart as they can easily surpass Apple by using acquisitions to gain value while Apple is throwing all their extra money into share buybacks. If Apple were using all those many tens of billions of dollars on large acquisitions, Apple would surely be untouchable. Apple could have easily acquired some major cloud service which seem to be very popular with big investors, but chose not to. Apple appears to have lost out of some very lucrative businesses.
What’s unfortunate now is Apple has that gigantic and wonderful headquarters which cost them over $5B and yet many employees don’t want to return to it.
Sure quite a few people that support a company that makes the crappiest software on the planet with the lamest support
Azure
Yes, most enterprise corporations embrace Windows OS and are now happily willing to pay for it in the cloud. Microsoft has created a wonderful cash cow by charging for virtual Windows instances in the cloud. Windows will never be displaced as the dominant desktop OS no matter how good MacOS is. Windows is ingrained into the computer society as anything can possibly be. Apple has nothing to compete with Windows in terms of low cost. Even with Apple Silicon in all their computers, Apple will likely charge the same amount of money for that hardware and that will continue to limit market share growth.
What choice do other computer makers have but to install Windows OS on their hardware. They’re surely not going to run Linux. ChromeOS is rather lame. My take is that most consumers and businesses don’t want more powerful computers, but they do want cheaper computers, so Windows will always be the most dominant desktop OS.
And it seems only Apple fans care outside of the investment world.
the Apple M1 chip has opened a staggering wound to the PC world and the M2 is the coup de grace
An easily surmountable one. It’s a SoC. What is needed is a standard.
And Apple is closing in on Google in the world’s most evil company race.
Way too premature to make such a judgement, but it isn’t irrational to have suspicion. Wealth often brings power and that can pervert. AAPL does show signs that its power is making it increasingly presumptuous of what’s best for the individual customer.
Google has had YEARS of corrupted power. Apple is s neophyte in comparison.
Serious question, not meant for snarky responses: I’m old enough to remember the original battles between Apple and Microsoft. I get Microsoft’s value then. What gives it all that value today?
Azure
Thanks. Too bad apple’s cloud offerings never seemed to be compelling enough.
Apple will show most of its gains at the end of the year. The massive buyback program will make a difference. Even if MSFT passes Apple temporarily in market cap, I doubt it will hold. Apple has new products coming and those new MacBooks should be a huge sales success. I’m just surprised how MSFT was able to make a comeback after its mobile initiative failed. There was a lot of money lost. Also Microsoft spent plenty of money on the Linked-In purchase. That’s one way Microsoft can easily keep pace with Apple. Making acquisitions. Microsoft has no problem with spending large amounts of money on acquisitions where Apple doesn’t seem interested in doing things that way. Although most big investors prefer companies with huge cloud services, I think Apple will continue making plenty of money on new hardware. I have great confidence in Apple. It’s OK if Apple doesn’t always have the largest market cap as long as I’m getting good returns.
Apple also steps away from needy acquisitions, let’s those patents slip away & then spend millions in court & paying lawyers for using them.
Apple is an iPhone company, let’s face it. Cloud services do not come close to Microsoft’s overall integration and ease of use, often work poorly [syncing] and expensive storage. Wasted money on stock buybacks and overpaid Hollywood actors and productions another area Apple lags behind the competition. Skinny bundle? Not! Overpriced computers and phones compared to the competition, yes, agree with many posts here Apple will never overtake Microsoft following the same course. We need fresh creative thinking at the Apple helm to move the company forward…
I think if you were to ask Tim Cook or the leaders at Apple about retaining that title – they would ask you “to what end?” Besides bragging rights and maybe some investor benefit, it does nothing in terms of their products or vision. Their goal is not to be the biggest – it is to be the best. Sometimes, the best outsells everything else. Sometimes, by its nature, the best remains more exclusive.
Apple remains a juggernaut whether it is the most valuable company or not. They are selling more Macs, iPads, watches and iPhones than ever before. The trend towards decentralized workers continues to tilt in Apple’s favor as does the trend for enterprise applications to ditch desktop clients in favor of using a browser.
There will always be a certain segment that loves things like virtualized desktops and dumb terminals but they’re not setting the world on fire and are cumbersome in a mobile world.
If MSFT had kept its 5% stake in AAPL imagine what it would be worth today…
Apple/China is now vulnerable if MS is “smart enough” to take advantage. Considering all the Steve Ballmer wannabe’s MS will likely fail but a door is now open. China has now taken control of Apple as they honestly control all of their manufacturing. As a result will tell Apple what they will or won’t say to their people an now other people. Example.. https://macdailynews.com/2021/08/20/chinese-communist-party-cracks-down-on-private-sector-handling-of-data/. Apple will be told what they will do or they will get spanked into order by China. If MS was smart its time to play that card. Now an eco system without China may have a chance. If people are too scared to go to movies because of Covid- Delta the thought about China “watching us” is a great play for any non China company to get involved.
This may be a minority view, but if Apple proceeds with it’s on-device scanning strategy, it will be like slow poison for the company, until the cliff drop-off comes in about 2023. It is something that is distasteful and disquieting for people. There will be a slow drift away from Apple as this permeates from fanbois out to the greater public. I understand why MDN and the other Apple-oriented sites don’t want to touch this — they depend on Apple products to maintain their audience. However, this is the biggest issue with Apple right now. Frankly, I discuss this issue with everyone I know, and they are all surprised and disappointed. Almost all indicate that it will impact their buying decisions moving forward. And, not to say too much, I know a LOT of people.