Microsoft Just Surpassed Apple To Claim Market Cap Crown, Why This Matters
AI has not only been a buzzword among tech giants, it has been a driving factor in investments as well. One of the more notable investments Microsoft has made in the recent past is a $10 billion investment in OpenAI. Along with that investment, Microsoft has incorporated OpenAI’s technology across its family of software products. One of those areas where the company has integrated AI is in its search engine, Bing, in order to challenge Google’s stranglehold on web searches.
Apple, on the other hand, has been struggling lately. Sales have taken a big hit in China, a key market for the Cupertino-based company, and face stiff competition from Huawei in the country as well. Apple’s outlook in China is not expected to improve this coming year, as bans from using the company’s devices are gaining ground in the country. Analysts report that the slow sales in China have resulted in a 30% year-on-year decline within the country.
Adding to Apple’s woes, Redburn Atlantic Equities analyst James Cordwell downgraded the company from buy to neutral last week, remarking that there is “little room for upside over the next few years” in iPhone growth and an “anticipated underwhelming March quarter.” Legal battles over the sale of the latest Apple Watches have not helped the company’s financial outlook either.
Microsoft, however, received accolades following its discussion late last week on artificial intelligence capabilities to developers at an event in San Francisco, California. Analysts came away from the event “encouraged by the momentum around the most mature AI products,” as reported by CNBC.
Analysts have made parallels between the recent shift in financial prowess and the early 2000s, when the market began favoring internet and tech companies over consumer and financial firms. One thing that is certain at the moment is that AI is king in tech. NVIDIA and Amazon have also placed an emphasis on AI, and both companies have experienced substantial market increases over the past year. And while Microsoft’s market value has risen by over $1 trillion, Apple is paying the price for its tardiness to the AI game.
