Microsoft surpasses Apple to become the most valuable company ever

Company News

by Glenn Dyer

In a historic turn of events, Microsoft has officially dethroned Apple to claim the title of the most valuable company ever. Founded decades ago by Bill Gates and others, and listed in 1986, Microsoft's journey reached a pinnacle last week with a staggering market capitalization of $US3.125 trillion, marking the highest value ever recorded for any company.

This milestone comes as Microsoft's market value surpassed the previous record set by Apple, which reached $US3.09 trillion last July. As of Friday, Apple's market cap stood at $US2.916 trillion, underscoring Microsoft's significant lead in the race for valuation supremacy.

Notably, Microsoft is also the first US company to close a session and a week with a market cap exceeding $US3.1 trillion, further solidifying its position as a market powerhouse. The company's stock closed the week at $US420.55, just shy of its all-time high of $US420.82, achieved in Friday's trading frenzy.

Driving Microsoft's meteoric rise is its deepening involvement in artificial intelligence (AI), with its shares surging by a remarkable 60% over the past 12 months alone. In contrast, Apple's shares closed last week at $US188.85, marking a modest 25% increase over the past year, with a peak of $US196.62 recorded in mid-December.

Examining key financial metrics, Microsoft boasts a price-earnings ratio of 38.03, surpassing Apple's ratio of just over 28. Comparatively, the S&P 500 index had a price-earnings ratio of 27.55 during the same period.

Despite market fluctuations and global challenges, both Microsoft and Apple have outperformed the S&P 500 over the past five years, starting from February 2019, a year before the onset of the pandemic. While the index witnessed an 81% increase, Microsoft's shares soared by an astounding 288%, showcasing the company's resilience and growth trajectory. Similarly, Apple's shares experienced a remarkable uptick of 342% during the same period, underscoring the enduring appeal of the tech giants in the eyes of investors.

As the technology landscape continues to evolve and reshape the global economy, Microsoft's ascension to the summit of corporate valuation serves as a testament to the company's enduring innovation and strategic prowess. With AI poised to redefine industries and unlock new frontiers, Microsoft's leadership position underscores its potential to shape the future of technology and drive further value creation for shareholders and stakeholders alike.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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