Microsoft Tops Apple as World's Largest Company: Is the Leadership Sustainable?

investing.com:

In a seismic shift in the tech industry, Microsoft (NASDAQ:MSFT) briefly dethroned Apple (NASDAQ:AAPL) as the world's most valuable company yesterday, boasting a market cap of $2.888 trillion against $2.887 trillion for the Cupertino, California-based behemoth.

While the shift in leadership was only momentary, with Apple reclaiming its position before market close, this change of forces may suggest a potential reshaping of the big tech landscape in the long run.

In fact, since the beginning of the year, it has been evident that Microsoft's ascent to becoming the world's largest company was not a question of «if» but rather of «when.»

Now, the most interesting question lies in whether Microsoft's leadership is sustainable — and for how long.

Let's take a deep dive into the two giants' latest news and financials with our InvestingPro tool to better understand where we stand right now.

The primary factor influencing the shift in leadership is the broader global macroeconomic backdrop shaping the tech landscape in 2024.

While Apple has held the coveted title of the most highly valued company on the stock market since 2011 — being only briefly topped by Saudi Arabia's Aramco (TADAWUL:2222) amid the rise in oil prices in 2022 — recent developments indicate a more challenging landscape for the iPhone maker than for its peer.

For years, tech companies have been valued with an expectation of rapid growth fueled by an acceleration of the Chinese economy in both consumer and production sectors.

However, the landscape has shifted, marked by China's anticipated GDP deceleration and a transformation in the economic matrix.

This simultaneous increase in production costs and dampening of expected sales have altered the dynamics