AI investments helped Microsoft reach $3 trillion market value after Apple

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Microsoft's stock market value crossed $3 trillion (roughly Rs. 2,49,35,925 crore) for the first time on Wednesday, retaining its position as the world's second most valuable company after Apple.

Shares of Microsoft and Apple have been competing for the top spot as the most capitalized stocks on Wall Street since the beginning of the year, with the iPhone maker briefly losing its crown to the software giant in early January. .

Microsoft shares rose 1.7 percent to a record high of $405.63, enabling it to breach the $3 trillion market capitalization mark. But it later closed at $402.56, giving Microsoft a valuation of $2.99 ​​trillion, just below the limit price of $403.65 that would have put it above $3 trillion.

Apple shares pared earlier gains and closed 0.35 percent lower at $194.50, giving it a market cap of $3 trillion, according to LSEG data.

Backed by its investment in ChatGPT maker OpenAI, Microsoft is widely seen as the leader in the race for market dominance in the rollout of generative artificial intelligence (AI) amid other tech giants including Google owner Alphabet, Amazon.com, Oracle and Facebook. Is seen in. Owner Meta Platform.

Using OpenAI's technology, Microsoft has launched new versions of its flagship productivity software products as well as its Bing search engine, hoping to better compete with Google's flagship search offering.

Apple, on the other hand, is facing slowing demand for its iPhones, especially in China, where the company has been offering rare discounts to customers to boost sales amid tough competition from domestic rivals like Huawei Technologies.

“I think it's AI optimism for Microsoft,” said Stifel analyst Brad Rayback, adding that Apple doesn't have the same “clear AI story” with concerns about iPhone sales growth rates and penetration.

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

Buoyed by AI optimism, Microsoft shares are up about 57 percent in 2023 and up 7 percent this year. Apple's stock rose 48 percent last year and is up about 1 percent year to date.

Wall Street's record highs will be tested in the coming weeks as megacap US technology companies begin reporting results.

© Thomson Reuters 2024


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