Microsoft Closes Gap On Apple Amid Latter's Stock Downgrades

As Apple's stock price continues to slide due to downgrades, currently, Microsoft's market value is only $100 billion less than Apple's, marking the narrowest gap between these two giants in over two years.

Apple has suffered two downgrades in a span of 3 days, and this turbulence has given Microsoft a chance to quietly catch up.

At present, Apple still holds the throne for the highest market value in the U.S., while Microsoft is in second place with a market value of $2.73 trillion, approximately $100 billion below Apple.

Data from FactSet shows that since November 22nd, 2021, Apple's market value has remained above Microsoft's, but the gap between the two is now at its lowest level.

In 2023, Microsoft's stock price increased by a total of 57%, higher than Apple's increase of 48%.

Thanks to the popularity of artificial intelligence, Azure's cloud computing business has become a significant factor supporting Microsoft's stock price rise over the past year.

Moreover, robust corporate expenditures and a long-term partnership with OpenAI have boosted Microsoft's share price. Last year, the first developer's conference and the power struggle within OpenAI's leadership catalyzed record-breaking highs for Microsoft's stock.

So far this year, tech stocks have had a challenging start, with Apple facing particularly severe challenges. This week, the company was downgraded twice by investment banks, and its market value evaporated $160 billion in three days.

On Wednesday, a Barclays report led by Tim Long downgraded Apple's stock rating from 'hold' to 'underweight.' This is the first time that the bank has given Apple this rating since 2019.

We are still picking up weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads, and wearables, Barclays analyst Tim Long wrote in a note this week.

On Thursday, Piper Sandler's chief analyst Harsh Kumar, who has been supporting Apple for nearly three years, also downgraded the tech giant due to expectations that a weakened macroeconomic environment would suppress iPhone demand.

In overnight markets, Apple's stock fell 1.3%, marking its fourth consecutive day of losses and hitting its lowest point since November 7. Their shares have fallen more than 5% over the last three trading days. Microsoft's stock fell about 0.7%, with a total loss of about 1.7% this week.

$MSFT(MSFT)