Microsoft's market value surpassed the $3 trillion mark for the first time on Wednesday, retaining its position as the second-largest company in the world by market capitalization, just behind Apple. 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 Apple's iPhone-producing company briefly losing the lead to the software giant earlier this month.
Microsoft shares reached a record level of $405.63, an increase of 1.7%, allowing the company to break the $3 trillion threshold. Apple shares traded at $195.50, up by 0.3%, resulting in a market value of $3.02 trillion, according to data from the London Stock Exchange Group.
Backed by its investment in OpenAI, creator of the ChatGPT chatbot, Microsoft is widely viewed as the frontrunner in the race among tech giants to deploy generative artificial intelligence, alongside other companies like Alphabet (Google's parent company), Amazon.com, Oracle, and Meta Platforms (the parent company of Facebook).
Using OpenAI's technology, Microsoft has launched newer versions of its flagship software as well as its search engine Bing, which is expected to improve its competitive prospects against the dominant search engine Google.
In contrast, Apple is facing declining demand for its iPhone devices, especially in China, where the company is offering rare discounts to boost sales amid fierce competition from local rivals like Huawei Technologies.
Brad Reback, an analyst at Stifel Financial Corp, stated, "I think this is due to Microsoft's support for artificial intelligence," adding that Apple appears to lack a "clear AI direction," along with concerns about iPhone sales growth and market penetration.
According to data from the London Stock Exchange Group, 54 analysts covering Microsoft stock have set an average target price of $425, up from $415 a month ago, with an average recommendation of "buy."
The rise of Wall Street firms to record levels will be tested in the coming weeks as major American companies begin to report their earnings.
