Apple — one of the most powerful companies on the entire planet — has just been surpassed by Microsoft as the new highest market cap leader. There's a lot of talk around 'Big Tech' these days. Consumer tech companies are among the biggest in existence, they're raking in heaps of money, and that's resulted in a lot of debate as to whether or not they should be more heavily regulated. Regardless of that discussion, the numbers these companies report are constantly jaw-dropping. Google parent company Alphabet just confirmed Q3 revenue of $65.12 billion. Apple increased its quarterly revenue by 29 percent for a hefty $83.4 billion total. These types of earnings are unfathomable, but they've become the norm for such companies.
Among all of these tech giants, Apple is often recognized as the most dominant. Why? It generates an incredible amount of revenue, is behind the most popular consumer tech products, and has an unignorable status symbol its competitors can't match. This winning combination pushed Apple to reach a $1 trillion market cap in August 2018 and a $2 trillion market cap in August 2020. In July of last year, Apple surpassed Saudi Aramco to become the world's most valuable company.
After holding onto that title for over a year, Apple's position in the number one spot has come to an end. As reported by CNBC on October 29, Microsoft just surpassed Apple to become the new most valuable publicly traded company. Microsoft snatched the title at 10:03 AM ET with a market cap of $2.45 trillion — going beyond Apple's $2.41 trillion market cap. This certainly has the possibility to change as the year goes on, but for now, Microsoft is the current leader.
How Microsoft Beat Apple In Its Race To The Top
There isn't one single reason for Microsoft's success, but rather a few different things that likely put it here. For one thing, Apple's recent earnings for its fiscal fourth quarter didn't meet Wall Street expectations. Despite overall revenue being up by 29 percent compared to 2020, Apple only reported $83.36 billion revenue compared to the $84.85 billion expectation. Tim Cook also admitted that the current chip shortage has cost the company $6 billion.
On the flip side, Microsoft has seen more positive news. The company temporarily surpassed Apple in early 2020 just as the effects of COVID really started to hit. Microsoft also crossed the $2 trillion market in June of this year shortly after unveiling Windows 11. With Windows 11 now available — as well as multiple new Surface products also announced this year — there's a good chance Microsoft's lead holds for a bit. As of 10:30 AM EDT, Microsoft's stock was sitting at nearly 47 percent higher compared to this time last year. Apple, by comparison, was up just 11 percent. It's all but guaranteed these numbers will change as 2021 goes on, but regardless, Microsoft gets some time to shine in the spotlight.
Source: CNBC