For the first time in eight years, Microsoft reclaimed its top stop from Apple as the most valuable company in the world, at $812.93 billion over Apple’s $812.60 billion. The power shift was brief, of course, and now the two are in constant contention.
You may recall that Apple first stole this title in 2010 when the New York Times actually called it “the end of an era and the beginning of the next one.” But Apple may not be able to keep up the momentum they have developed since then. Sure, the stock has been on a consistent—earlier this year reaching a milestone $1 trillion valuation—but investors are getting more and more concerned over slowing iPhone sales. That flagship product still makes up 60 percent of Apple’s revenue as a whole.
Indeed, Apple has warned that it may fall short of Wall Street estimates during the holiday season, a forecast which pushed the stock price down. Some reports indicate that Apple has picked back up production on the iPhone X because iPhone XS sales are weaker than expected. More importantly, perhaps, Apple has also said they will no longer reveal publicly how many iPhones, iPads, and Mac computers it sells, in a strategy which should make it more difficult for analysts to accurately estimate future iPhone sales.
On the other hand, Microsoft has quite a diverse portfolio of products—they do not rely simply on the popularity of a niche product. While Microsoft was not able to break into the mobile communications industry with a successful Windows Phone entry, the Windows operating system, the Xbox gaming system, and the Surface tablet computer make up roughly 36 percent of the company’s revenue.
By comparison, Google—who Microsoft passed earlier this year, in terms of market value—earns 86 percent of its revenue from ads (though it should be noted that Google places these ads throughout a vast library of apps, products, and other services).
Microsoft stock confidence has been up in large part because of the appointment of Satya Nadella as CEO. Since February of 2014, then, Nadella’s focus on moving Microsoft to cloud computing has helped the company to move forward, particularly at a time when another tech company is poised to take a stand in that field. Amazon is Microsoft’s nearest rival in the cloud computing world.