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According to 13 institutional investors, Microsoft's early advantage in artificial intelligence has positioned the software giant to surpass Apple's stock market value in the next five years. Microsoft's shares have surged by 7% in 2024, propelling its market capitalization above $3 trillion and dethroning Apple as the world's most valuable company.
Race for Second Place? Nvidia's Surge Alarms Tech Giants
In the eyes of 13 investment strategists and portfolio managers consulted by Reuters, Microsoft is expected to outpace Apple in terms of value over the next five years. The Redmond-based software maker's recent achievements in generative AI have given it a significant advantage. While short-term fluctuations in share prices and valuations may occur following the quarterly reports, the experts remain confident in Microsoft's long-term prospects.
Yahoo reported that though Microsoft and Apple continue to vie for the top spot, some analysts suggest the race could turn into a second-place battle. With impressive gains driven by AI-powered chips, Nvidia has caught investors' attention.
Microsoft's early investments in ChatGPT-maker OpenAI and its integration of generative AI technology across its business have given it an edge over competitors.
Microsoft's AI Strengthens Cloud Computing and Applications
Investors and analysts highlight Microsoft's cloud-computing offerings as a critical aspect that could benefit from AI integration. Microsoft's prospects appear promising, with AI technology bolstering its competition against Amazon and Alphabet in the cloud market. Additionally, its applications business, including Outlook, now offers users AI assistance when composing emails, further exemplifying the company's commitment to leveraging AI.
While Apple has quietly incorporated AI into its products, such as enhancing iPhone photography capabilities, investors eagerly await further details on its AI plans. As economic recovery remains sluggish in China, Apple faces challenges regarding iPhone demand and market share erosion from resurgent competitor Huawei.
Wall Street Analysts Favor Microsoft's Growth Potential
Wall Street analysts support Microsoft's prospects with overwhelming support. Fifty analysts recommend buying Microsoft shares, and four issue neutral ratings.
Notably, none of the analysts surveyed recommend selling Microsoft stock. In contrast, Apple receives favorable ratings from 26 analysts and neutral ratings from 12, but two analysts suggest selling due to concerns about lackluster iPhone sales.
Photo: Ashkan Forouzani/Unsplash
