Apple and Microsoft Jostle for Title of World’s Most Valuable Company

Apple (AAPL) briefly reclaimed its place as the world’s most valuable company from Microsoft (MSFT) on Wednesday as shares of both companies rose to record highs amid anticipation of growth fueled by artificial intelligence (AI).

Apple shares climbed nearly 3% Wednesday to close at an all-time high of $213.07, extending gains following its announcements earlier this week of Apple Intelligence, a custom AI system, and an AI partnership with Microsoft-backed OpenAI. The rise boosted the iPhone maker’s market capitalization to a record $3.267 trillion.

Meanwhile, Microsoft shares climbed close to 2% Wednesday to finish at a record high of $441.06, lifting Microsoft’s market cap to $3.278 trillion. The bump helped Microsoft’s market cap break ahead of Apple’s late in the session.

Apple Jockeying With Microsoft

Apple’s gains Wednesday briefly propelled its market cap ahead of Microsoft’s, before Microsoft overtook Apple later in the session. Microsoft had surpassed Apple as the world’s most valuable company in January amid buzz about its investments in AI and concerns about flagging iPhone sales. 

Apple’s gains on Wednesday built on Tuesday’s, when the stock surged 7.3%, increasing its market cap by $215 billion. That was Apple’s biggest one-day increase ever and the third-largest on record. 

The only company to have added more in market value in a single day is AI chip giant Nvidia (NVDA), which gained $272 billion the day after its February earnings report and a further $221 billion the day after it reported yet another stellar quarter in May. 

What Propelled Apple Stock Higher This Week?

Bank of America analysts said in a note Wednesday that AI enhancements coming to the iPhone 15 Pro, iPhone 15 Pro Max, and iPhone 16 could drive hundreds of millions of people using older iPhones to upgrade in the next two years, fueling growth for Apple.

“Older stuff will be obsolete if you want AI—including all those iPhones bought during COVID,” said analysts at Melius Research, who “now have more conviction in our Super Cycle thesis that could even result in iPhone revenue growth of about 20% for up to 2 years.”