Microsoft on Friday regained its crown as the world’s most valuable publicly traded company from Apple, whose shares plummeted after a weak quarterly update from the maker of iPhones and Mac computers.
Microsoft’s 2.2 percent profit on Friday boosted its market value to $2.49 trillion. Apple fell 1.9 percent, bringing its market cap to $2.46 trillion.
Microsoft reported this week that its third-quarter revenues have skyrocketed, aided by a pandemic-driven wave of cloud computing driven by a shift to remote work. The company’s quarterly revenue grew 22 percent, its biggest gain since 2014.
“We are still at the dawn of digital transformation and Microsoft is benefiting from this trend,” said Rishi Jaluria, an analyst at RBC Capital Markets, noting that Microsoft’s cloud software Azure has fallen behind its dominant rival, Amazon Web Services. .
Apple missed analyst predictions in the results released after markets closed Thursday night as chip shortages and factory outages due to the coronavirus pandemic hit production.
Microsoft and Apple have competed for the position of most valued publicly traded company since Apple first overtook Microsoft in 2010, holding its position until 2018.
Microsoft last recovered above Apple in the midst of the pandemic-induced sell-off in 2020. The stock is up more than 7 percent since the start of the week, bringing its profit for the year so far to nearly 50 percent.
Another tech giant, Amazon, fell 2.2 percent Friday after warning that rising costs from labor shortages would weigh on its revenues for the remainder of the year. Valued at $1.7 trillion, Amazon is the fourth largest company by market capitalization, after Google’s parent company, Alphabet.
The disappointing updates contrasted sharply with several other major tech groups like Alphabet reporting earlier in the week, whose strong results helped tech-heavy Nasdaq Composite overtake broader stock markets, surpassing its record-high hit in early September.
The Nasdaq Composite rebounded from early losses on Friday, rising 0.3 percent and finishing the week higher 2.7 percent.
Nevertheless, the weaker performance this year points to a shift of investors from technology stocks, which had been boosting the market, to more cyclical companies that would benefit from economic recovery.
Tech stocks were the worst performing sector in the S&P 500 in the first quarter, as expectations of a reopening of trading pinned companies beaten by the pandemic. As the exuberance faded in the second quarter, technology stocks bounced back to leading gains before sliding back to give way to financial stocks and communications companies in the third quarter.
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