Microsoft’s (MSFT.O), tab stock market value crossed the $3 trillion milestone for the first time on Wednesday, retaining its place as the world’s second most valuable company, just behind Apple.
Microsoft and Apple shares have been vying for the top spot as the most capitalized stock on Wall Street since the start of the year, with the iPhone maker briefly losing its crown to the software giant earlier in January.
Shares of Microsoft hit a record high of $405.63, up 1.7%, enabling it to breach the $3 trillion market capitalization level. Apple’s shares were trading at $195.50, up 0.3%, giving it a market value of $3.02 trillion, according to LSEG data.
Backed by its investment in ChatGPT maker OpenAI, Microsoft is widely seen as a frontrunner in the race for market dominance in the rollout of generative artificial intelligence (AI) among other tech heavyweights, including Google owner Alphabet, Amazon.com, Oracle, and Facebook owner Meta Platforms.
Microsoft has released updated versions of its popular productivity software products and its Bing search engine, which is anticipated to more effectively rival Google’s market-dominating search service, using OpenAI’s technology.
In contrast, Apple is seeing a decline in the market for its iPhones, especially in China, where it is increasing sales by providing customers with infrequent discounts in the face of fierce competition from domestic rivals like Huawei Technologies (HWT.UL).
Stifel analyst Brad Reback stated, “I think it’s AI optimism for Microsoft,” noting that Apple doesn’t appear to have the same “clear AI story” and raising doubts about the penetration and growth rates of iPhone sales.
The 54 analysts covering Microsoft’s stock have a median price target of $425, up from $415 a month ago, and their average recommendation is “buy”, according to LSEG data.
Wall Street’s run-up to record highs will be put to the test in the coming weeks as megacap U.S. technology-related companies begin reporting results.