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Microsoft Rivals Apple As The World's Most Valuable Firm

Microsoft Rivals Apple As The World's Most Valuable Firm
A recent drop in Apple's stock due to concerns over iPhone sales has put the Silicon Valley tech titan in risk of being surpassed by Microsoft as the world's most valuable business.
Fresh concerns about smartphone demand have sent Apple's stock down 4% so far in 2024, after rising 48% last year. Microsoft is up around 2% year to date, following a 57% surge in 2023.
Apple fell 0.4% on Wednesday, while Microsoft rose 1.6%, further diminishing the iPhone maker's lead. Apple's stock market capitalization is currently $2.866 trillion, vs Microsoft's $2.837 trillion.
Apple's market capitalization peaked at $3.081 trillion on December 14, while Microsoft's value touched $2.844 trillion on November 28.
There was a drop of 30% in iPhone sales in China in the first week of 2024, according to Jefferies analysts in a client note this week, adding to signals of increasing competition from Huawei and other domestic rivals.
Sales of Apple's Vision Pro mixed-reality headset begin in the United States on February 2, marking the company's largest product launch since the iPhone in 2007. However, in a research released on Monday, UBS anticipated that Vision Pro sales would be "relatively immaterial" to Apple's earnings per share in 2024.
Microsoft has briefly surpassed Apple as the most valuable firm many times since 2018, most notably in 2021, when concerns about supply chain bottlenecks caused by the COVID-19 pandemic weighed on the iPhone maker's shares.
Both tech stocks appear to be relatively costly when compared to their predicted earnings, which is a standard approach of assessing publicly traded companies. According to LSEG statistics, Apple is selling at a forward PE of 28, which is much higher than the previous 10-year average of 19. Microsoft is trading at roughly 31 times forward profits, up from its 10-year average of 24.
Apple's most recent quarterly report, released in November, included a sales projection for the holiday quarter that fell short of Wall Street expectations, owing to sluggish demand for iPads and wearables.
According to LSEG, analysts predict Apple's revenue to increase 0.7% to $117.9 billion in the December quarter. This would be its first year-over-year revenue rise in four quarters. Apple reports the results on February 1. 
Analysts expect Microsoft to report a 16% gain in revenue to $61.1 billion, driven by continued development in its cloud sector, when it reports in the coming weeks.

Christopher J. Mitchell

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