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  • 23 Jun, 2024

Microsoft edged ahead of its latest rivals on investor hopes for AI-led growth.

Microsoft ( MS ) closed last Friday and surpassed Apple to become the world's largest company by market capitalization.

While Apple has faced several headwinds, the software giant's share price has continued to rise this year, building on last year's strong performance. Microsoft's aggressive rollout of a variety of AI features over the past year has been rewarded by investors who hope the Seattle giant will be best positioned to benefit from the AI ​​boom.

Microsoft's share price rose more than 3 percent this week, giving it a market cap of $2.89 trillion, just ahead of Apple, which fell nearly 3 percent as its market cap fell to 2.87 trillion dollars. Microsoft briefly surpassed Apple in midday trading for the first time since 2021, before losing the top spot to the iPhone maker later in the session.

Shares of Apple, which reached a market capitalization of $3.81 trillion on Dec. 14, are up 48 percent this year. However, Microsoft is up 57% this year.
Read more: Apple's downgrade could lead to tech disaster

So far this month, Apple shares are trading slightly lower than Microsoft's 5% gain. This comes as concerns about sluggish iPhone sales, particularly in China, a key market, have led to a number of downgrades on Apple's stock by analysts.

"China could hamper Apple's performance in the coming years," said broker Redburn Atlantic, according to Reuters. In a note to clients, brokerage analysts pointed to increased pressure on Apple due to renewed competition from Huawei and heightened tensions between the United States and China.