Someone time traveling from five years ago might not believe it, but it’s 2018 and Microsoft is poised to surpass Apple as the most valuable company in the U.S. by market capitalization.
The Redmond-based tech giant has managed to avoid the trappings of a stock market drop that wiped out hundreds of billions in value from some of the world’s biggest tech companies.
Depending on which stock-tracking service you follow, Microsoft is roughly even or a couple billion short of Apple’s value, with Microsoft briefly pulling ahead and then closing just shy of the lead during trading today. Apple finished the day with a market cap of $814.64 billion to Microsoft’s $814.45 billion, per YCharts.
- How Microsoft got here: It wasn’t that long ago that Microsoft was flailing away with hardware like the Zune and struggling with its mobile strategy, while Apple was sitting pretty thanks to the iPhone and a trendy line of computers. But under CEO Satya Nadella, Microsoft has cut out the dead weight, getting rid of languishing divisions and focusing on high-growth areas like cloud computing and core services like Office 365.
- How Apple got here: In July, Apple became the first trillion-dollar company. However, the cratering stock market and reports that Apple is cutting production orders for its three new highly hyped iPhones shaved more than $300 million off its market cap in just a few weeks and sent its stock down 25 percent since early September.
- Why it matters: Whether Microsoft is worth a few million more than Apple is not going to make or break either business. But market cap can give a better window into a company’s overall momentum than its stock price. That Microsoft — a company that many still associate with relics of the ’90s like Clippy and the dotcom era — has risen to the top of the market cap mountain shows how far it has come under its current leadership.
- What others are saying: In this race, Microsoft “is the tortoise in a technology world obsessed with hares,” writes Bloomberg’s Shira Ovide, sticking to what it does best and steadily outpacing flashier tech companies branching out in all different directions. Microsoft has brushed off its past failures and shifted to a focus on cross-platform technologies, according to Tom Warren at The Verge, though it will continue to face plenty of competition in areas like cloud computing, mixed reality and artificial intelligence.