Microsoft ( MSFT.O ) has eclipsed Apple to become the world’s biggest company by market capitalization thanks to its deep focus on generative artificial intelligence (AI), a sector that is gaining increasing investor favor.
The technology giant, which along with Nvidia ( NVDA.O) and Amazon (AMZN.O) has placed a strong emphasis on AI, has seen significant market growth over the past year. Microsoft’s market value increased by more than $1 trillion.
Analysts are looking for parallels between this shift and the early 21st century, when technology and Internet companies began to replace consumer and financial firms at the top of the market.
According to LSEG data, Microsoft’s market capitalization was $2.887 trillion, an all-time high, while Apple’s market capitalization was $2.875 trillion at Friday’s close, after peaking at $3.081 trillion on Dec. 14.
Microsoft incorporated OpenAI technology into its suite of productivity software, a move that helped spark a recovery in its cloud computing business between July and September. Its lead in artificial intelligence also created an opportunity to challenge Google’s dominance of web search.
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Apple, on the other hand, is facing challenges with declining demand, including for its flagship product, the iPhone.
The company is particularly struggling in China, a key market where the economic recovery from the COVID-19 pandemic is slow and competition from a resurgent Huawei is intensifying, impacting its market share.
Other AI-focused technology players such as Nvidia, Meta Platforms ( META.O ) and Alphabet ( GOOGL.O ) have also seen their market capitalization jump big in the past year.
