On Friday, Microsoft surpassed Apple in market cap, declaring it the world’s most valuable publicly-traded company, after Apple dropped earnings expectations on Thursday. As of 07:30 p.m. (IST), Microsoft had a market cap of $2.45 trillion, while Apple’s stood at around $2.41 trillion.
Apple published about revenue that fell short of Wall Street expectations throughout the company’s fiscal fourth-quarter on Thursday due to supply chain constraints. CEO Tim Cook described CNBC’s Josh Lipton the revenue shortfall is calculated at $6 billion, but he expects more critical supply chain issues in the December quarter.
iPhone sales at the organisation were up 47% year-over-year but also fell short of analyst expectations. The company’s fourth quarter only carried a few days of iPhone 13 sales. Microsoft defeated revenue expectations during its fiscal first quarter, which rose about 22% year-over-year. That was the quickest growth since 2018.
Apple was the first corporation to reach a $1 trillion and $2 trillion market cap. It became the world’s most valuable publicly-traded firm when it outdid state oil giant Saudi Aramco in market cap last year.
Microsoft last surpassed Apple in market cap in 2020 as the pandemic wreaked destruction on supply chains. It first settled above a $2 trillion market cap in June after showing the first significant update to Windows operating system in more than five years.
Microsoft and Apple came into being in 1975 and 1976, respectively, one year apart. Through their long public-market history — Apple went public in 1980 and Microsoft in 1986—they’ve carved out different markets. Apple is for customers. The company has gone from desktops to mobile phones but it hasn’t changed the target market. Microsoft is targeting the company. And although its market has increasingly changed from boxed to cloud applications, its clients remain the same.
Both companies are characterized by their founders — Bill Gates and Steve Jobs are probably the two most important people in the history of computing — but, surprisingly, under successor CEOs, the majority of the value of the companies was established.
In the case of Apple, since Cook took the reins in 2011, 86 percent of the current market value of the company has been generated. At Microsoft, Satya Nadella, who took over for Gates’ successor Steve Ballmer as Microsoft CEO in 2014, accounted for 80 percent of value creation. The most critical thing for the organization is seeking a great leader. Microsoft and Apple prove the case.
At 08:00 p.m. IST, Microsoft’s stock was up nearly 47% year to date, while Apple’s was up around 11%.