Microsoft’s market share surpasses Apple’s
The two companies have been racing neck and neck, with their market share valuations floating about US$3 trillion. Recently, Microsoft’s figure jumped up 7% to US$3.027 trillion, surpassing Apple’s market cap by several billions. Reuters talked to several heavyweight investors about the prospects before the competing giants, and all 13 of them were univocal: Microsoft is highly likely to be the king of the mountain for the next 5 years or so.
What’s behind Microsoft’s success?
The first driver behind the recent surge of Microsoft’s market cap is the company’s attention to AI. Its close cooperation with OpenAI, US$10 billion of investments (most weren’t cash but computing power, by the way) have finally begun to pay off. So far, Copilot has been touted a success, with a flow of reports and pieces describing how it helps increase productivity and efficiency in various industries. Moreover, some analysts believe that Copilot Pro, a paid version of the service, which costs US$20 user/month, can generate Microsoft an additional US$10 billion in revenue by 2026.
Microsoft did well in January 2024. Snapshot from Yahoo Finance
Given the scale of this competition and the size (read: inertia) of the involved players, any such achievement is impossible without a failure on the side of the losing party. In the case of the considered pair, Apple suffered a blow to the sales of its flagship moneymaker, iPhone. The COVID-19 pandemic ignited the respective downward trend, and the latest model did not perform as expected in China, one of the key markets for Apple.
What’s in it for us, the users?
Two things, at least: Microsoft will want to further capitalize on the success, and Apple is likely to do everything it can to catch up and then regain leadership. Thus, competition between the two major hardware and software companies accelerates, and this sort of situation is, ultimately, always beneficial for the final consumers. In simple words, it means better products at affordable prices. And if you’re doing some investments of your own, it makes perfect sense to listen closely to those who’ve made this activity their business and plot the path accordingly.
