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New Delhi: Apple Inc.’s stock plunged on Friday, propelling Microsoft Corp. to the top of the world’s stock market by market capitalization. Apple’s stock dropped 1.8 percent after it reported fourth-quarter revenue that fell short of analysts’ expectations, giving the iPhone maker a market worth of $2.46 trillion. After announcing earnings that beat expectations for the 11th quarter in a row earlier this week, Microsoft surged 2.2 percent to a market value of $2.49 trillion, surpassing Apple.
“If you’re looking for safety in tech, Microsoft probably seems like a safer bet to me than Apple,” Michael Matousek, head trader at US Global Investors, said in a phone interview. “If there was a downturn in the economy, I would expect Microsoft to stand up better, because its products are diversified across more businesses.”
Microsoft last dethroned Apple in the first half of 2020, when investors flocked to growth stocks in the wake of the Covid-19 pandemic. Microsoft’s weekly rise was its highest since November.
Microsoft became the second US public firm to surpass a $2 trillion market value in June, driven by expectations that its dominance in cloud computing and enterprise software will expand further in a post-coronavirus future. This year, its stock has outpaced Apple and Amazon.com Inc. on forecasts of long-term earnings and revenue growth, as well as expansion in areas such as machine learning and cloud computing. Microsoft is up more than 49%, Apple is up around 13%, and Amazon is up more than 3%. Also Read: Petrol, Diesel Prices Today, October 30: Fuel prices hiked again, reaches record highs–check prices in your city
Its stock isn’t cheap, trading at a 20% premium to the Nasdaq 100 Index, which is dominated by technology. Despite the high valuations, investors have continued to add to their stakes in tech stocks this year. The Nasdaq 100 Index has outperformed the S&P 500 Index by more than 22%, while the Nasdaq Composite has gained almost 20%.
“Size begets size and strength begets strength. This is the sort of thing that is nice to see; Microsoft was a rock star in the 90’s — one of the four horsemen — and it has clearly gotten its mojo back,” Matousek said.
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